'Disrupted or dead': AI is crushing a generation of startups built before ChatGPT

Matthias Balk | Picture Alliance | Getty Images Five years ago, venture capitalists were pouring money into American startups selling everything from lingerie subscriptions to scheduling software, anointing them with billion-dollar valuations before most even turned a profit. It was a frothy era for startups, fueled by a combination of cheap money and pandemic-boosted demand. But even after the Federal Reserve took some froth off by starting to raise interest rates in 2022, many founders believed that they could grow into their inflated valuations, investors told CNBC. Then, an app called ChatGPT arrived. "The ChatGPT moment was when people said, 'Holy smokes, the next generation of entrepreneurs, their coding language is spoken English,'" said Samir Kaul, a partner at the venture firm Khosla Ventures, an early backer of OpenAI . "Now you're seeing 50 engineers do what it would've taken 500 engineers to do five years ago," Kaul said. "We had to completely reshuffle how we valued these companies." While the shares of public software companies like Salesforce , ServiceNow and Workday got hammered this year because of the threat from artificial intelligence, a quieter reckoning has been unfolding in the private markets. …