One of the earliest investors in the AI world, Elad Gil, is making his next big bet. He’s previously invested in companies like Perplexity, Harvey, and Character.AI, and now he’s focusing on modernizing traditional businesses with artificial intelligence. His strategy is simple: buy law firms and other professional services companies, use AI to improve their efficiency and profit margins, and buy other similar businesses.
Gil has been working on this model for three years. He believes that generative AI is very effective at automating language understanding, editing, copywriting, coding, customer service, and other back-office tasks. He says that if a business owner implements the technology themselves, the process will be much faster and more profitable. For example, if a company increases its profit margin from 10 percent to 40 percent, it will give it a significant financial advantage and allow it to acquire other businesses before competitors.
Gil has invested in two companies based on this model so far. One of them is Enam Co., which focuses on employee productivity and has reached a valuation of $300 million in a year. Andreessen Horowitz and OpenAI Startup Fund have also invested in it. Gil believes that this approach is different from the old technology-based roll-up models. While previous experiments only used technology superficially, this time AI is fundamentally changing the workflow.
Elad Gil has seen many roll-up ideas to date, but he has only invested in a few of them. He emphasizes that each team must have strong technologists and people with private equity experience. Otherwise, the model may not work.
He is currently backing AI-based companies such as Harvey, Abridge and Sierra AI. Each of them operates in the legal services, healthcare and customer service sectors. These companies have already achieved billion-dollar valuations or are on the way to doing so.
Gil believes that in some areas, the main winners have emerged. These include legal, healthcare and customer service. However, he says that everything is not yet over, but a clearer path forward has emerged. He continues to work with a small team that understands the technology in depth and is testing it in practice.
For Elad Gil, this is not just a new investment phase, but an exciting time for technology. He is showing how traditional businesses can be modernized with the help of artificial intelligence. This means that a new economic model is emerging at the intersection of AI and the real sector.
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