AI App Crisis, OpenAI Does Math, Big Nvidia Deal

**Jayden Schaeffer** (0:00)
Welcome to the podcast, I'm your host, Jayden Schaeffer, guys. Today is my 30th birthday, but I had to record a podcast because there was some crazy stuff happening. Number one, there's a bunch of research and data coming that is showing AI-powered apps are really struggling with long-term retention. Also, ChatGPT can now create interactive visuals that are gonna help you understand math and science, which Google was kinda doing something similar. It's gonna be really cool to see ChatGPT do this. And third, Thinking Machine Labs has just created a massive compute deal with Nvidia, which is pretty exciting for a company that has such a legendary background and has raised so much money. So we're gonna get into all of these stories today. But before we do, I have to say a huge shoutout. In the last couple of days, I've asked people for my birthday. If you could leave a rating and review, if you haven't already, I wanna read the most recent review that someone dropped. This is from Eating Crab yesterday. He said, just wanted to say thank you for the podcast. I don't have very much time in my day. Being a full-time student, I'm working full-time, but I have a huge passion for AI. Being able to keep up with your podcast helps me keep in the loop. I appreciate it. Keep it up and happy birthday. A huge shout out to Eating Crab. Thank you so much for the review. Guys, today is my birthday. I'm turning 30 Before I go through a midlife crisis, if you guys could do me a massive favor for today, and please leave a rating review if you haven't already, it would be the greatest birthday present of all time. I will be eternally grateful over on Apple or Spotify or wherever you get your podcast. I know it's usually annoying, but today's my birthday. So if you've ever appreciated that podcast in the past or today, it would be greatly appreciated to drop a review. All right, let's get into the episode today. So the thing that I think is really interesting is kind of this idea right now that all of the AI powered apps are really struggling to keep long term, people engage long term retention on the apps. And I think there's a couple of problems with this. As someone that has built AI powered apps in the past, and as someone that is actively working in an AI startup, AI Box and a company, I can understand where a lot of this challenge is. And that is, I think, with AI coming out and the power of AI being so incredible, I think we definitely had a really big wave, especially in the last couple of years, where there was a lot of concepts of what AI could do and would be able to do, and a lot of people I think overhyped or oversold their apps. And I think that's gonna be the primary driver of low retention. In addition, I do think that right now, I try probably 10 times as much software as I have over the last 5, 10 years working in the industry. And so I think right now, we just try so much more, and then we kind of settle on what works best. I think if you're a developer and you're creating a tool with AI in it, you have one shot really for someone to go try your tool and for it to wow them and for them to be impressed and be like, okay, I will keep this as part of my long-term tool belt of the tools I use. If they try it and it flops, there's a bunch of tools from big companies that I've tried in the past, they've flopped and I haven't gone back. I think one of those examples would be something like Runway for Video. This is a platform that I tried a lot in the early days. It wasn't that great. And I mean, you have to give them a huge kudos for being first, but I never really got back to that platform and then Suno came out and a lot of these other video generations and you have Higgs Field, which has a whole bunch of models on there. And I tend to just use more of those types of tools today than going back to some of the OG video tools. I think this is kind of a trend you'll see with a lot of, I know it's kind of like a random story from my experience, but I think you're gonna see that a lot. So there was a recent report that came out of Revenue Cat, and they showed that the subscription infrastructure for more than 75,000 different developers, and they kind of analyzed it because they power all of that subscriptions. And by the way, these are kind of my favorite reports. Mercury, a SaaS kind of bank, SaaS-focused bank is an awesome one. They do kind of a state of AI every year, where they show the top AI companies that people are actually using and actually have subscriptions to. So it's kind of cool to see Revenue Cat do something similar. What they found though, these are just awesome reliable places, because you know exactly where money is actually being spent. But in any case, they found that while AI apps monetize really quickly, they really struggle to keep users around. And I'll even say for my own startup aibox.ai, when we first launched, there was a lot more bugs at the beginning, with anything and a lot of different features that we didn't have. And I think our churn was pretty high when we first launched. I'm pretty proud of being able to pull that churn rate down and get people to stick around a lot longer, but it was a lot of work for us to achieve that and to be able to bring that down. I think a lot of other people struggle with that too. According to their 2026 state of subscription apps report, AI apps experienced significantly higher churn compared to traditional apps. So this is interesting, right? It's not just like, oh, people try more software and they use less today. Well, people actually still keep a lot of their OG apps that they have and OG subscriptions, but it's the new AI ones that they're just trying out this new buzz thing, oh, look, I can do this crazy cool thing and make an image of me looking like XYZ. You go try it and then you kind of dump it. So according to the report, they analyzed more than 1 billion in-app subscription transactions, and that was about $11 billion in annual developer revenue. I mean, based off of their scale and their ecosystem, I think this is a pretty good indicator. They have like iOS, Android and web apps. And what's interesting to me is that, despite I think a lot of the hype around AI, most subscription apps are not built around it. Only 27% of apps analyzed, according to their report, were categorized as AI-powered. About 72% of those are just non-AI apps. So a majority of apps, and this is interesting because I think we see a lot of the bigger players like immediately injecting AI in. But I think a lot of the smaller apps and companies are like, well, if we don't need it, maybe there's not a reason to just, you know, bolt something on that's not necessary. And that's making up, you know, almost 73% of all apps.