The Tensor

Sequoia the leading VC firm is out with their annual AI thesis and with the launch of OpenAI’s o1, they are placing significant bets on the next evolution of artificial intelligence—models that don't just process data rapidly but actually pause to reason. They're investing in startups developing AI with advanced reasoning capabilities, aiming to fill market gaps and reshape entire industries. Opportunity size? $10 Trillion or more.

Highlights:

• Why now?: Traditional AI models excel at quick, pattern-based responses (System 1 thinking). VCs are now funding AI that employs deliberate, inference-time reasoning (System 2 thinking), akin to a human solving complex problems by thinking....