Even three years after the generative AI boom began, most AI startups continue to generate revenue by serving businesses rather than individual consumers. While consumers embraced general-purpose large language models like ChatGPT, specialized consumer-facing AI applications have struggled to gain lasting traction. At a TechCrunch StrictlyVC event in early December, Chi-Hua Chien, co-founder and managing partner at Goodwater Capital, noted that many early consumer AI products—especially in video, audio, and photo—were initially impressive but quickly lost relevance. “A lot of early AI applications around video, audio, and photo were super cool,” Chien said. “But then Sora and Nano Banana came out, and the Chinese open-sourced their video models. And so, a lot of those opportunities disappeared.” He compared these fleeting applications to the early iPhone flashlight app—an initially popular third-party tool that was soon built into the operating system itself. Chien believes the current state of consumer AI resembles the smartphone era of 2009–2010, a time when the platform was still maturing before truly transformative apps like Uber and Airbnb emerged. “I think we’re right on the cusp of the equivalent to mobile of the 2009–2010 era,” he said, pointing to Google’s Gemini as a sign of technological parity with ChatGPT, a milestone that could signal the start of a new wave of consumer AI innovation. Elizabeth Weil, founder and partner at Scribble Ventures, described the current phase of consumer AI as an “awkward teenage middle ground”—full of potential but lacking clear direction. She and Chien agree that a new kind of device, beyond the smartphone, may be necessary to unlock AI’s full consumer potential. Chien argued that a device used 500 times a day but only exposing users to 3% to 5% of their real-world experience is too limiting to support the next generation of AI applications. Weil concurred, emphasizing that smartphones are not ambient—meaning they don’t constantly sense or respond to the user’s environment. “I don’t think we’re going to be building for this in five years,” she said, holding up her iPhone to illustrate the point. In response, both startups and major tech companies are racing to develop new personal devices. OpenAI and former Apple design chief Jonny Ive are reportedly working on a “screenless,” pocket-sized device. Meta’s Ray-Ban smart glasses are paired with a gesture-controlled wristband. Meanwhile, a number of startups are testing wearable AI products like smart pins, pendants, and rings, though most have so far failed to deliver compelling user experiences. Not all future consumer AI will require a new device, however. Chien suggested that a highly personalized AI financial adviser, tailored to an individual’s unique financial behavior, could be a strong candidate for long-term success. Weil predicted that an “always-on” AI tutor, offering customized, real-time learning support, could become a staple of daily life—delivered through existing smartphones. Despite enthusiasm for AI’s potential, both investors remain skeptical about the viability of stealth AI-powered social networks. Chien criticized these platforms for creating environments where thousands of AI bots interact with user content, turning social engagement into a solitary experience. “It turns social into a single-player game. I’m not sure that it works,” he said. “The reason that people enjoy social networking is the understanding that there are real humans on the other side.”