--- title: "CEO of AI Startup Says Many AI Startups Will Fail Because They’re Making a Serious Mistake" description: "This CEO says generative AI is all flash, no substance — and ultimately, will fail to generate major new revenue streams for VCs' billions." date: "2022-10-28" modified: "2022-10-28" authors: - name: "Maggie Harrison Dupré" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/mharrison" url: "https://futurism.com/the-byte/ceo-ai-startups-will-fail-serious-mistake" categories: - "Artificial Intelligence" tags: - "ai" - "artificial intelligence" - "image generator" - "the digest" --- # CEO of AI Startup Says Many AI Startups Will Fail Because They’re Making a Serious Mistake ![This CEO says generative AI is all flash, no substance — and ultimately, will fail to generate major new revenue streams for VCs' billions.]() *\Image: Getty Images/Futurism\* ## All Flash No Pan Generative AI is undeniably having a moment. OpenAI's text-to-image creator DALL-E has been dazzling the public for months, while its standout rival, a newcomer dubbed Stability AI, just [raked in]() a cool $101 million in funding for its Stable Diffusion system. Video and music generators are [popping up as well](), and some experts predict that synthetic media will soon make up the [vast majority]() of digital content. But according to Will Manidis, the founder and CEO of AI-driven healthcare startup ScienceIO, generative AI is all flash, no substance — and while it might be attracting VC cash now, most ventures will quickly fade into startup oblivion. "There are hundreds of millions of dollars being deployed towards glorified tech demos built on top of identical datasets," the founder [wrote in a Tuesday Twitter thread](), referring to these generative machine systems. "Most, if not all of these, will fail." "Where generative AI will change the world is in narrow, mostly boring domains," he continued. "VCs are ignoring this." ## Wasted Potential Manidis' argument, which centers on the VC-beloved text-to-image generators, rests heavily on the belief that the "creator economy" doesn't really have much room for growth. Sure, [it's fun]() and sometimes useful to produce the AI-made artworks, but turning everyone into creators won't actually generate new, major revenue streams. Image generators might put tools like Adobe and Canva out of a good chunk of business. But where — outside of misuse, of course — can it truly go from there? That being said, Manidis definitely believes that AI will revolutionize industry — just in less glamorous sectors. AI-generated [anthropomorphic bowling balls]() are cool and all, but in his eyes? Data entry is where AI is really about to shine. "Billions of hours of human potential every year are wasted on menial tasks. Data entry, form filling, basic knowledge work kind of stuff," he [continued in the thread](). "Large language models are uniquely good at these tasks." "So while your favorite creator economy VCs are funding new ways to generate dog pictures on your phone," Manidis [added](), "there are billions of economic value to be generated by repurposing foundational models to solve basic data entry tasks." Of course, as Manidis runs a data-focused AI company, this is all a very convenient line of thinking. Still, he does raise some interesting points. Whether he's right, though, remains to be seen. **More on AI generation:** *[Record Labels Terrified by Rise of AI Music Generators]()* ## Author At Futurism, I've reported extensively on the rise of AI as a cultural and business force shaping the media industry, and more broadly how those dynamics are changing how we all consume and share information and relate to one another. I'm also fascinated by public health policy and ethics, the role of emerging tech in politics and governance — and the powerful people and forces at those intersections — climate change, and the environment. My investigation on Sports Illustrated's use of AI-generated authors with fictional biographies won a 2024 Mirror Award for "Best Story on Media Coverage of Artificial Intelligence in Journalism and the Media" from Syracuse University's SI Newhouse School, I contributed to Niemen Lab's 2025 Predictions for Journalism series, and I've discussed my work for Futurism during appearances on NPR, CNN, the BBC, the CBC, and more. I grew up in rural Pennsylvania and attended the University of Massachusetts Amherst, where I played Division I field hockey for the Minutewomen as a midfielder. Since then, I've lived in New Orleans, Louisiana and Manhattan, New York. I spend my free time running, reading, perusing archival fashion, and searching for the world’s best negroni. I also have a debonair tuxedo cat, Westley, who's named after "The Princess Bride." ### Author social links [Bluesky]()