Which Businesses Will Survive AI? | Michael Dempsey

Michael Dempsey argues that Compound is built to invest against hype by doing research first, then deploying capital only in areas where it has long-duration conviction. He says the firm focuses on deeply technical businesses in machine learning, robotics, healthcare, bio, crypto, and adjacent hard-science areas, and prefers to pass on hot themes that fall outside that thesis.

A major theme is how AI is likely to reshape software. Dempsey thinks many “GPT wrapper” businesses will not survive, that consolidation is coming, and that the strongest AI companies will likely own more of the stack. He is skeptical of broad SaaS exposure, mildly short HubSpot, neutral on Salesforce, and more constructive on a few exceptions like Figma, though he says even that debate is still live.

He is more optimistic on bio and certain materials-driven deep tech. He says 16 of the 23 companies in the current venture fund are in bio, and he likes businesses that can create novel materials, products, or drug-discovery platforms with clear commercial paths. On crypto and markets more broadly, he is wary of hyper-gambling, prediction markets, and the nihilism he thinks they reinforce. He also argues tech’s public image has worsened because of insularity, financial excess, and a mismatch between technological ambition and civic responsibility.