Recorded at the AI Engineer World's Fair in San Francisco. Stay up to date on our upcoming events and content by joining our newsletter here: https://www.ai.engineer/newsletter

AI Engineer

Sarah Guo from Conviction VC discusses the current state of AI startups and predictions for 2025-2026. She highlights the success of AI coding tools like Cursor, which grew from $1M to $100M ARR in 12 months, and explains why code was the first major AI application breakthrough. The talk emphasizes building 'cursor for X' - domain-specific AI tools that understand workflows intimately rather than generic chatbots. Guo argues that execution is the primary moat in AI, not first-mover advantage, and encourages building thick workflow wrappers around AI models. She predicts continued capability improvements across reasoning, multimodal AI, and voice interfaces, with conservative industries adopting AI fastest due to a 'leapfrog effect'.

State of Startups and AI 2025 - Sarah Guo, Conviction