welcome to money is freedom
a podcast
exploring how finance and freedom connect in our lives
created from thoughtful research
and narrated by Notebook lmaai
this series brings you clear
meaningful insights into finance and beyond
welcome to episode 50 where we unpack how AI
companies are showing
unprecedented acceleration in revenue
growth and global expansion
significantly outpacing earlier tech innovation waves
like SAS
this rapid progress
is driven by their ability to hit revenue milestones
faster achieve immediate global reach
and leverage innovative business models
let's break it down
artificial intelligence it's a
it's everywhere right
you hear the buzz constantly
mm hmm all the time
usually it's about you know
the potential
or maybe just headlines from a few massive companies
right the big names
but what if the real economic
story isn't just potential
what if it's happening like right now
and maybe faster than people realize
exactly faster and wider
so today
we're doing a deep dive into what we're calling the AI
economy and we're not guessing here
no this is grounded
we've got actual real world transaction data
it kind of pulls back the curtain on how fast these AI
companies are growing revenue
and maybe even more surprisingly
how global they are from the get go
and the source for this uh
this deep dive is pretty unique
we're looking at Stripe's latest analysis right
they handle payments for
I think it's a staggering 78% of the Forbes AI 50 list
you know wow
open AI anthropic midjourney cohere wow OK
so they see the money flowing
they really do this isn't just theory
it's based on payment data from their top 100 AI
companies hard numbers perfect
so with that kind of view
our mission today is well
let's cut through the noise
let's figure out what this data really tells us about
say three key trends that are shaking things up
not just in tech but kind of everywhere
sounds good where should we start
okay let's unpack this
the first thing that really honestly jumped out of me
and I think it'll surprise you listening to
is just the speed
the sheer like unprecedented speed of AI growth
oh absolutely
it's blazing fast these startups
they're hitting major revenue milestones
way faster than we've ever seen before right
it just redefines fast growth
it really does I mean
you compare them to the fastest growing sauce
companies out there historically yeah
AI companies hit $1 million in annualized revenue
uh a median of four months faster
so like eleven and a/2 months for AI versus 15 for SAWs
okay four months faster to the first million
but then it gets even more dramatic
the gap widens for $5 million annualized revenue
AI companies reach that a full 13 months faster
13 months wow
yeah 24 months for AI versus 37 for Saas
and what's maybe even Wilder is the acceleration
we're seeing with the newer AI companies
new those founded between say 2020 and 2023
they're hitting these milestones
about three times faster than the AI
companies founded before 2020
three times faster give me an example OK
so getting to $1 million AAR for the newer cohort
it's taking just five months on average
compared to 16 months for the older AI group
five months versus 16 that's incredible acceleration
it really is and the why behind this
I mean it seems pretty clear
it's just surging demand
we saw worldwide company AI usage jump from what
55% in 2023 to 72% in 2024
and generative AI usage that more than doubled
people are actually using it massively
yeah and you know
put it in historical context
US individual AI adoption rates are roughly double
the adoption rates of PCs
and the internet at similar points in their history
double the internet adoption rate
that's genuinely astonishing
it puts things in perspective
doesn't it it really does
those numbers are uh kind of mindmoggling
but let's make it concrete
can we talk about some specific companies
sure like uh
Harvey the AI legal assistant
they quadrupled their revenue just in 2024
quadrupled or or Bolt
they help you build web and mobile apps
hit 20 million dollar a R R
in 2 months 2 months
it's hard to even process that speed
I know and lovable a no code builder
17 million dollar AR in three months
and and cursor the AI coding assistant
over 100 million dollar AR in just three years wow
so for you listening
maybe you're an entrepreneur
maybe you're in a small business
what this really shows is that building software
turning an idea into a real application
that makes money that barrier is dropping like a stone
absolutely it democratizes development in a way
it completely changes who can build the next big thing
right and think about the knock on effects
what's fascinating here is this rapid monetization
it fuels this powerful cycle
how so well
you get investment because the returns are so fast
that investment fuels more innovation
which allows faster global expansion
which attracts more investment
it's this virtuous cycle spinning incredibly fast
a feedback loop unlike anything we've seen pretty much
okay so we've got this incredible speed
but it's not just how fast
it's also where they're scaling
isn't it which brings us to the second big insight
AI companies are basically born global
they're just skipping the old playbook
yeah the traditional start local
then expand model it seems
many AI companies are just bypassing that entirely
so the data shows this oh yeah
the data is pretty compelling here
scripts top 100 AI companies
they sold into roughly twice as many countries as sauce
companies did in their very first year
twice as many what are the numbers
it was 55 countries for AI versus 25 for sauce
in year one okay
and that pattern holds up
by year four
AI companies were selling into 104 countries
compared to just 57 for saw
still almost double the reach
so they maintained that global footprint
right from the start exactly
which you know
raises a really interesting question why
why are AI buyers popping up seemingly everywhere
instantly not just in the usual big tech hubs right
you'd expect maybe Silicon Valley
London Berlin
but we're seeing significant adoption
especially on a per capita basis in smaller countries
too places like Iceland
Estonia Luxembourg
Switzerland Singapore
they're becoming AI hotspots huh
so the demand is just everywhere
it appears so
the desire for these tools seems incredibly widespread
regardless of traditional geographic tech concentration
that's fascinating is there a
like a stand out example of this global reach
well think about midjourney
the AI image generator okay
in 2024 alone
they sold their services to users in over 200 countries
and territories 200
that's basically the whole world pretty much
it's a massive testament to that truly global
almost borderless demand for AI
and just think for anyone listening
think about how that immediate global market changes
everything your strategy
your competition
it's a whole different ball game from day one
absolutely the playbook is being rewritten in real time
okay so speed and global reach from the start
let's pivot now to the third key trend
which is maybe more about the how yeah
the uh
the rapid emergence
of really innovative business models
how these companies actually make money right
because it's not always just the standard
subscription model we're used to
so what does the current landscape look like
well right now
most of the top 100 AI companies on stripe
maybe around 80% they do initially offer broader
sort of horizontal tools like what
things like content generation
that actually
makes up about 75% of the initial offerings
which is huge wow
or you know
general chatbots
or the underlying AI infrastructure itself
kind of foundational stuff
okay broad tools first
but here's where it gets really interesting right
there seems to be this clear shift happening
uh huh a definite move towards highly specialized
industry specific or vertical solutions
and these aren't just like
simple wrappers around a big language model
no not at all
these are purpose built tools
they're designed to
integrate deeply into specific industry workflows
and solve very particular problems
can you give some examples
sure so in healthcare
you're seeing companies like a Bridge Knolla
Deepscribe
focusing on things like clinical documentation
okay then you've got studio
specifically for real estate marketing
Sketch Pro for architecture
slang dot AI handles restaurant phone reservations
Host AI is for property management
so very targeted
solving one industry's pain point really well
exactly deep integration
specific value proposition
and it's not just what they're selling
but how they're charging for it that's changing too
right beyond just simple subscriptions
that's a key part of it
new payment models are popping up
that really match how AI is actually used
like what well
first there's a big move
towards usage based billing
pay as you go
basically sort of you pay based on consumption
maybe compute time or data processed
or the number of API calls you make
it aligns the price directly with the value
or the cost incurred and it makes it much easier
for customers to start using the service
because the initial commitment is lower
makes sense yep
any examples there yeah
hex they do complex data analysis
they processed over 500 million
usage based billing events
last year alone
just shows the scale as demand for compute power surges
half a billion building events
wow okay
so usage based what else
then there's the rise of outcome based pricing
so you pay for results exactly
payment is directly tied to the results the AI achieves
this really lowers the risk for the customer
hmm and it's particularly suited for these emerging
agentic work flows we're starting to see
where AI takes actions autonomously
interesting but don't these flexible models
like usage or outcome based
create uncertainty for the AI company
subscriptions are predictable
that's definitely a challenge
revenue forecasting can be trickier
so how are they managing that
a really common solution emerging is the prepaid
credit model customers buy credits up front
ah okay
like a prepaid phone plan
exactly it helps the AI startups manage their cash flow
gives them more predictable revenue chunks
and it gives customers control over their spending
plus it can reduce fraud risk in self serve sign
UPS so kind of a win win
it seems to be working well for many
and all this innovation in how value is exchanged
it leads us to something really on the cutting edge
doesn't it this idea of agentic commerce
yes this is where it gets potentially transformative
explain that what is agentic commerce
it's basically AI agents
starting to take on roles that humans
traditionally handled in commerce like
like researching product options
actually making purchases
managing subscriptions negotiating all autonomously
the AI acts as an economic agent on behalf of a user
or a business so the AI is becoming the customer almost
or the procurement department in a way
yes or the customer service agent
think about 11 labs they're already using AI
agents to handle subscription management
and even process refunds all through voice automation
or companies like perplexity and payment
are building ways for AI
agents to make payments seamlessly
as part of their workflows
right so if you connect this to the bigger picture
yeah this isn't just a new feature
is it no
it feels much more fundamental
it could really change how businesses interact
how they transact maybe even how markets function
is this just theory
or are businesses actually preparing for this
the preparation is definitely starting
recent surveys show uh
fifty three percent of global business leaders say
they are actively preparing for agtech commerce
over half
and 63% rate its importance as a 7 out of 10 or
higher within the next two years
so high importance near term horizon
wow and you see it in the tools being adopted too
things like the Streep Agent toolkit
being downloaded thousands of times per week
and hundreds of startups
focus specifically on AI agents
launched on stripe just last year
with huge growth expected in 2025
thousands a week hundreds of startups
this isn't niche
it feels like a genuine movement taking shape
it really does so what does this all mean
taking all three trends together
yeah it feels like a complete reimagining
of the digital economy
I think that's a fair way to put it
okay
so let's quickly recap what we've really dug into today
based on that stripe data
three big things stood out
uh huh first
that incredible
almost unbelievable speed AI companies are
are hitting revenue milestones
way faster than sauce benchmarks
second they're born global
expanding worldwide practically from day one
skipping the old local first playbook
a much wider faster international reach
and third this rapid evolution in business models
moving from broad tools to vertical solutions
and adopting usage based
outcome based and prepaid models
all culminating in this rise of agentic commerce
right where AI
itself becomes an active participant in transactions
so putting it all together
this cycle fast investment
rapid innovation immediate global
expansion new transaction models
it's not just about cool new tech
is it no
it's much bigger than that
it's fundamentally reshaping
how entire industries operate
how value is created and exchanged globally
it feels like a genuine paradigm shift
and for you listening hopefully
understanding these trends
gives you a bit of a shortcut
a way to be really well informed
about one of the most dynamic shifts happening
anywhere in the economy right now
yeah whether you're prepping for a meeting
or just trying to make sense of all the AI headlines
hopefully some aha
moments in there that give you a fresh perspective
definitely and maybe here's something to uh
to really chew on after this okay
leave us with a thought consider how these shifts
the vertical
AI becoming common and gentic commerce taking hold
how might they reshape industries that aren't tech
think about manufacturing
retail finance
healthcare hmm
when AI isn't just a tool in the business
but a partner doing business
exactly what new roles emerge
when AI agents handle purchasing or customer service
how do companies need to change their core operations
their strategies when their partners
or even their customers might be AI
that's the next wave to watch