What You Missed in AI This Week (Google, Apple, ChatGPT)

Unknown Source June 13, 2025 29 min

artificial-intelligence generative-ai startup investment ai-infrastructure google openai apple

58 Companies

63 Key Quotes

5 Topics

🎯 Summary

Comprehensive Summary: This Week in Consumer AI - VO3, Voice Upgrades, and Consumer AI Economics

This episode of “This Week in Consumer AI,” hosted by A16Z Consumer Partners and twin sisters Justine and Olivia Moore, provides a rapid-fire overview of the latest breakthroughs in generative AI, focusing heavily on video and voice, alongside crucial data on the accelerating economic performance of consumer AI startups.

1. Main Narrative Arc & Key Discussion Points

The episode follows a three-part structure:

The AI Video Explosion: Deep dive into Google DeepMind’s VEO 3 model, analyzing its capabilities, limitations, and immediate impact on social media content creation.
Voice Realism Advances: Examination of significant upgrades to ChatGPT’s Advanced Voice Mode and the new emotional control features in 11 Labs’ 11B3 model, highlighting the shift toward truly conversational and expressive AI audio.
Consumer AI Economics: Presentation of A16Z data revealing that consumer AI startups are achieving unprecedented revenue growth rates, challenging traditional SaaS benchmarks, driven by high consumer willingness to pay for AI-native utility.

2. Major Topics, Themes, and Subject Areas Covered

Generative Video: VEO 3 capabilities, viral trends (e.g., Stormtrooper vlogs), and the challenges of character consistency and generation length.
Generative Voice: Improvements in conversational realism, emotional nuance, and prompting for vocal characteristics (accents, emotion, interruptions).
Big Tech AI Integration: Discussion of Apple Intelligence announcements, perceived disappointment, and the reliance on outsourcing core AI features (like Siri enhancements) to partners like OpenAI.
Startup Economics & Monetization: Analysis of ARR ramp rates, the shift to subscription models in B2C AI, and the emergence of revenue expansion opportunities (upsells/credits).
Creative Workflow Automation: A practical demo showcasing how AI tools (ChatGPT, Ideogram, Krea) can be used end-to-end to build a new consumer brand (e.g., the “Melt” frozen yogurt concept).

3. Technical Concepts, Methodologies, or Frameworks Discussed

VEO 3: Google DeepMind’s latest video model, distinguished by its native audio generation alongside video from text prompts. It is currently limited to eight-second generations from text input.
11 Labs 11B3: Introduction of tag-based prompting for voice generation, allowing users to specify emotional states (“sadly,” “resigned”) and sound effects directly in the text editor, bypassing the need for complex speech-to-text-to-speech workflows for inflection control.
AI Tourism Behavior: A term used to describe high initial traffic and low retention among free users exploring new AI products, contrasting sharply with the strong retention of paid subscribers.

4. Business Implications and Strategic Insights

Consumer AI Dominance: Consumer AI startups are now achieving revenue growth (median $4.2M ARR at Month 12) twice as fast as B2B AI startups, reversing historical trends.
Forced Subscription Model: High inference costs (Cost of Goods Sold) for early AI models forced consumer startups to adopt subscription models, which consumers have proven willing to pay for due to the high utility of AI-native products.
Revenue Expansion in B2C: Consumer AI is seeing revenue expansion (upsells via credit packs) typically reserved for enterprise or gaming models, indicating deep user engagement among paying customers.
Bottoms-Up Enterprise Adoption: Companies like 11 Labs are seeing rapid conversion from low-cost consumer/prosumer use to high-ACV enterprise contracts as employees adopt tools personally and then champion them internally.

5. Key Personalities, Experts, or Thought Leaders Mentioned

Justine and Olivia Moore: Hosts and partners on the A16Z Consumer team, providing investment insights and practical demonstrations.
Google DeepMind: Creators of the VEO video models.
OpenAI: Mentioned regarding the rollout pace of ChatGPT voice improvements relative to competitors.

6. Predictions, Trends, or Future-Looking Statements

Video Coherence & Cost: Future video models (beyond VEO 3) will struggle with coherence over longer durations, and there will be a strong push for condensed, optimized models to reduce high inference costs.
Faceless Content: VEO 3 enables the explosion of “faceless channels,” where AI-generated characters tell stories, lowering the barrier to entry for content creators who do not want to use their own likeness.
Voice Realism Catch-Up: OpenAI’s recent voice updates were necessary to catch up to competitors (like Sesame, Gemini, GROK) who had previously surpassed ChatGPT in conversational realism.

7. Practical Applications and Real-World Examples

VEO 3: Viral TikTok/Instagram content featuring consistent, non-human characters like Stormtroopers or Yetis, leveraging the model’s ability to maintain character consistency when faces are obscured.
11B3: Creating realistic, interrupted dialogue for narrative storytelling, ads, or podcasts, complete with specific accents and emotional cues.
Brand Creation Demo: Justine used ChatGPT for ideation, Ideogram for logos/product shots, and Krea for iteration to build the “Melt” frozen yogurt brand concept.
Utility Monetization: Consumers are paying $22/month on average for AI tools in areas

🏢 Companies Mentioned

UI's ✅ tech

And Flux Context ✅ unknown

Black Forest Labs ✅ unknown

Flux Context ✅ unknown

In AI ✅ unknown

Gen AI ✅ unknown

Then I ✅ unknown

Today I ✅ unknown

Fort Worth ✅ unknown

Gen Z ✅ unknown

Gen Z TikTok ✅ unknown

Genmo G ✅ unknown

AI Siri ✅ unknown

Can I ✅ unknown

SF Street Cleaning ✅ unknown

💬 Key Insights

"And so that sparked this idea for me of, 'Oh, that means that this can actually be used for, like, brands, product photos, or other marketing collateral because the logos and the products can be consistent.'"

Impact Score: 10

"And I think that is what makes it different than the 4o image model, which is the consistency to which it retains the item or the character, whatever, is much, much better."

Impact Score: 10

"I've seen it described as kind of like Photoshop, but with natural language prompts."

Impact Score: 10

"So it was like a true enterprise use case, but growing bottoms-up, which is a fascinating motion."

Impact Score: 10

"You have, like, real sort of upsell activity in consumer subscriptions, whereas you're not just paying $10 a month for the app, you're paying $10 a month for the image model. But then if you love it and you run out of credits, you're paying another $10, $12, $50 for additional credit packs..."

Impact Score: 10

"There's definitely a lot of tourism—we call it AI tourism behavior—in terms of free users, which means you get a lot of hits on your website, essentially, and most of those users don't stick around."

Impact Score: 10

📊 Topics

#artificialintelligence 86 #generativeai 11 #startup 6 #investment 4 #aiinfrastructure 2