Where VCs See Opportunity in Regulated AI

<p>AI is making software faster and cheaper to build. It is not making trust any easier to earn.</p><p><br></p><p>Simon Wu, Partner at Cathay Innovation, joins The Tech Trek to discuss how AI is changing investment opportunities across healthcare, fintech, insurtech, legal services, and other regulated industries.</p><p><br></p><p>The conversation looks at a major shift in software economics. Instead of simply selling seats, licenses, and tools, AI companies can increasingly perform more of the work and deliver the outcome a customer actually wants. That creates opportunities for new business models, especially in industries where customization and services historically made it difficult to scale.</p><p><br></p><p>Regulation adds another dimension. Compliance, accuracy, governance, and complex workflows make these markets harder to enter. But Simon argues that the same friction can create defensibility once a company earns the trust of its customers.</p><p><br></p><p>Key Takeaways</p><p><br></p><p>• Regulation can become a moat. AI may lower the cost of building software, but companies still have to earn the right to operate inside sensitive workflows.</p><p>• Software is moving closer to outcomes. Customers increasingly care about the result, not how many seats or licenses they purchased.</p><p>• AI changes the economics of customization. Companies may no longer have to choose as sharply between scalable software and labor intensive services.</p><p>• Human involvement still matters. In healthcare, wealth management, and legal services, AI can make professionals more efficient without requiring them to disappear from the workflow.</p><p><br></p><p>One Line That Stuck</p><p><br></p><p>“AI has dramatically lowered the cost of building software. It doesn&#39;t lower the cost of earning trust.”</p><p><br></p><p>Follow The Tech Trek for more conversations on AI, engineering, product, data, and building modern technology companies.</p>