One_Giant_One_Challenger_Endless_Opportunity
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NotebookLM
An Analysis by a16z
A Market of One Giant, One Challenger, and a World of Opportunity
The State of Consumer Al 2025
NotebookLM
Source: Data from Yipit.
Pay for only ONE subscription
91%
Pay for more than one
of consumers pay for more than one subscription across ChatGPT, Gemini, Claude, and Cursor.
9%
Only
Spend Concentration
Fewer than 10% of ChatGPT weekly users 10 pider'ster major model
Usage Concentration
Despite a flood of new products, consumer attention and spending remain highly concentrated.
The Consumer AI Assistant Market is Consolidating into a 'Winner Take Most' Dynamic
50%
ChatGPT
25%
Gemini
36%
ChatGPT
21%
Gemini
800-900M
ChatGPT
Gemini is at 34% of this scale on web, 40% on mobile.
Gemini
NotebookLM
Source: Data from Yipit.
(Month 12 Desktop Users)
Long-Term Retention
(DAU/MAU)
Engagement
(Weekly Active Users)
Scale
ChatGPT's Dominance is Defined by Massive Scale and Superior Engagement
NotebookLM
Source: Data from Yipit.
a larger user base) in each of the last five months.'
'Gemini's growth rate has actually accelerated (even on
66
At Month 12, Gemini's paid retention (57%) is now in the "same ballpark" as ChatGPT's (68%).
Paid Retention Closes the Gap
+300%
ChatGPT
+155%
Gemini
ChatGPT
+23%
Gemini
+155%
Paid User Growth (Year-over-Year)
Desktop User Growth (Year-over-Year)
But Google is Firing Up its Engines, and Gemini's Growth is Accelerating
NotebookLM
Connectors (G Suite, Microsoft, Notion, etc.)
Agent (presentation generation)
Tasks & Study Mode
Shopping Research
Record (transcriber)
Group Chats
Pulse (daily updates)
New In-App Experiences
The analysis notes that none of these new experiences have truly "broken through."
"It's hard to deliver a first class product experience within the constraints of the existing ChatGPT interface."
Critical Analysis
OpenAl's primary consumer strategy is to push new models and experiences through the existing ChatGPT interface.
Strategic Approach
OpenAl's Strategy: Expand the Universe Within the Core ChatGPT Experience
"first true new consumer platform in more than a decade."
potential for the
creating the
A new infrastructure for third- party developers to build experiences in ChatGPT,
having visited the download page
of ChatGPT users
<5%
Mac-only, with
Limited reach; still
(vs. 30%+ for top consumer apps)
retention sub-8%
Less successful as a social app, with D30
A powerful and well- executed Al browser.
global downloads
12M+
tool with
A powerful creative
NotebookLM
The Future Bet
Apps:
The New Interface
Atlas:
Sora: The Standalone App
Two Big Exceptions and One Future Bet Signal OpenAI's Broader Ambitions
- it's confusing to figure out where to access new products."
"The most significant area for improvement here is actually access
Many products have seen muted traction (Portraits, Doppl, Whisk, Gems).
The Challenges
New launches are not cluttering the core Gemini experience. They can 'sink or swim (as NotebookLM has!) on their own.'
The Benefits
Veo
Gemini
NotebookLM
Whisk
Gems
Doppl
Portraits
Unlike OpenAl's 'shoving everything into ChatGPT,' Google creates more surface area, launching models within Gemini but also creating separate, standalone products.
Strategic Approach
Google's Strategy: Build a Constellation of Standalone Experiences
NotebookLM
we've seen from Google perhaps ever in innovating on their core Ul."
'biggest swing'
"Described as the
An upcoming feature that remixes search tabs into interactive, custom web apps.
The Future Bet: Disco
8M MAUS.
The mobile app now has
doubled YoY.
more than
Web users
Usage is still growing after its 2024 viral moment.
NotebookLM
The Product Win: NotebookLM
visual and audio generation.
combining
video'
A 'breakthrough moment for Ai
Veo 3
NotebookLM
in its first week.
10M new
users
and bringing in
200M images
generating
Won consumer mindshare,
Nano Banana
The Model Wins
Google Won the Zeitgeist with Viral Models and a Breakout Product Hit
20M+MAUs.
and
$100M run rate
Scale:
product is 'much faster and more reliable than ChatGPT's Agent."
Their slide/document generation
Key Strength:
towards sophisticated users.
Skills and Artifacts, geared
Key Primitives:
Focus: Innovating on search and productivity workflows.
(Claude for Chrome, Desktop).
Almost all launches are within Claude
Focus:
NotebookLM
Invisible
Visual Electric
Read.cv
months.
(professional network), Visual Electric (creative tools), Invisible (agents).
$1B run rate in six
Code, which reached a
Hinted at by acquisitions: Read.cv
Claude
Continuing to invest in
Future Focus:
Future Focus:
users), Email Assistant.
Comet (Al browser with >1M
Key Launches:
Targeting the Productivity Hacker
Targeting the Technical User
Perplexity
ANTHROPIC
The Specialists Part I: Anthropic and Perplexity are Winning the 'Prosumer'
NotebookLM
Deeper integrations, like the Al translation in Instagram Reels.
Future Focus
primarily outside the U.S.
4.2M DAU/26.6M MAU,
Consistent growth, now at
Growth
Massive distribution across Facebook, Instagram, and WhatsApp.
A 'watchable' movie and a 'great' Al-generated game by end of 2026.
'Long click' on X images to edit or make a video with Grok.
Future Focus
Integration
Key Advantage
year.
in less than a
Meta Al standalone app, relaunched with 'Vibes' (a scrolling feed of Al video).
9.5M DAU/
38M MAU
From zero to
DAU
9.5M
Grok Imagine (image/video models with sound & lip sync).
(Ani and Rudi),
Companions
Standalone app, animated
MAU
Product
38M
Growth
Key Launches
The Distribution Behemoth
The Fastest Ramp in Capabilities
XAI
The Specialists Part II: xAI and Meta are Vying for Social and Entertainment
Meta
NotebookLM
Strategy
Standalone Experiences
Integrated Platform
Broad General
XAI
Meta
OpenAI
Google
Perplexity
ANTHROPIC
Niche & Prosumer Focus
The AI Landscape is Defined by Different Strategic Postures
Assistant
The White Space
NotebookLM
'Model companies don't have the intuition or, quite frankly, the attention and resources to be innovating outside their areas of core competency.'
Gemini
ChatGPT
Models
Products: Their attention is not on building novel, best-in- class consumer interfaces from scratch.
New Features via Existing
This commoditizes the core tech, benefiting application- layer companies.
The Models Themselves:
Where the Big Labs are Focused
Despite all the activity from the giants, the opportunity for startups has never been bigger.
This Leaves Huge White Space for Startups Building Dedicated Consumer Experiences
NotebookLM
These products have reached millons of users and grown revenue faster than
ever before.
Key Observation:
Al-powered CRM
Lovable
Al music generation
SUNO
Al creative tools
Al video editing
Al voice generation
KREA
Manus
1ElevenLabs
Al companions
Al-powered presentations
Al-native coding
CAI
Gamma
replit
The consumer Al products that have 'broken out" all have focused interfaces that deliver value beyond what the base models offer themselves.
The Winning Formula: Opinionated Interfaces that Give Consumers Superpowers
NotebookLM
Justine Moore: @venturetwins/[email protected]
@omooretweets/[email protected]
Olivia Moore:
If you're building in consumer Al, reach out to us.
Call to Action
like
The future of consumer Al will be defined by founders who build dedicated, product-led experiences. Startups can even benefit from upcoming platforms
ChatGpT's "Apps" for discovery and distribution.
The Application Layer is Open. If You're Building, Let's Talk.