AI Startup Ideas for 2025

What do investors and customers expect from AI startups?

As the new year approaches, it's time for new ideas and startups. We've reviewed new requests for startups from YC and other companies, collected relevant projects with traction, and now we're sharing these finds.

In this issue:

👨‍💻 What VCs and customers expect from AI startups in 2025

🚀 Which projects are already meeting expectations

⚙️ Best AI tools to help you with idea realization

How We Choose

It's great when you have an idea you believe in. But if that is the only factor, it is rather presumptuous to expect great success. Therefore, when compiling the list, we relied on those connected to the market and with a good idea of promising niches. First and foremost, on requests by YC, a16z, PwC, KPMG, and others.

As a general direction, we chose software projects as they are easier to implement and don’t require huge investments to launch.

We also didn’t choose too narrow niches, such as using AI to support nuclear power plants. If you plan to work in such a field, you will probably manage without our hints. And good luck!

And if you want to learn more about YC’s startups, we have these posts:

What AI Startups Will Change Our Life: YC W24 Batch Review

AI Agents | YC F24 Startups

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Government Software

The first (unexpected even to us) idea is to develop AI for government services. While GovTech has historically been considered a controversial and narrow category, there is now a lot of demand and a severe lack of supply in this space. That's the view of Harj Taggar, group partner at YC, who has advised more than 1,000 companies over the course of 17 batches.

According to Taggar, the government (primarily the U.S.) is actively seeking ways to cut costs and work more efficiently. And today's AI platforms are powerful enough to automate much of the administrative work the government spends billions on. A startup offering a good solution in this area will definitely find a customer.

Hazel | AI Procurement for Government

Hazel, founded by August Chen and Elton Lossner, is a good example of such a startup. This company was launched last year. Hazel sells AI-powered procurement software to the 19,000+ local, state, and federal government entities that procure $2.7T a year. The startup promises to write solicitations 10x faster and find 10x as many vendors, saving time and money.

Chen's and Lossner's company is just getting started, so they are not sharing results yet. However, Hazel managed to get into the W24 batch right after its founding and received $500,000 in pre-seed investment from Y Combinator.

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AI Copilots for Enterprises

Venture capital firm a16z predicts that AI copilots for enterprise businesses are one of the top trends for 2025. Partner James Da Costa claims that soon, “every white-collar will have an AI copilot.” The foremost opportunity for startups here is in automating vertical workflows.

This is supported by research: OpenAI and the University of Pennsylvania found that with access to an LLM, about 15% of all worker tasks in the U.S. could be completed significantly faster at the same level of quality.

Read AI

Seattle’s startup Read AI, launched by David Shim, shows how it works in practice. It sells AI tools to improve companies' productivity. Specifically, Read analyzes emails, messaging threads, and calls and then suggests action items based on its information analysis.

Founded three years ago, the startup got off to a pretty shallow start, but things have picked up as generative AI has evolved. It now connects 100,000 new accounts to its database every week. About 75% of Fortune 500 companies use Read AI products on an ongoing basis. The startup raised $81M in the last year.

Interesting fact: Read AI didn't spend any money on marketing. This was possible because the startup hit the target audience perfectly. To figure out how to do the same with AI, follow these links:

23 GPTs For Marketing & Startups : GPT Store Selection

Research Your Audience and Customers with AI