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Where does consumer AI stand at the end of 2025?

As 2025 comes to a close, consumer AI is entering a new phase. A small number of products now dominate everyday use, multimodal models have unlocked entirely new creative workflows, and the big labs have pushed aggressively into consumer experiences. At the same time, it is becoming clearer which ideas actually changed user behavior and which ones did not. In this episode, a16z consumer investors Anish Acharya, Olivia Moore, Justine Moore, and Bryan Kim look back on the biggest product and model shifts of 2025 and ahead to what 2026 may bring. They discuss why consumer AI appears to be trending toward a winner-take-most model, how subtle product design choices can matter more than raw model quality, and why templates, multimodality, and distribution are shaping the next wave of consumer products. Where do startups still have room to win? How will the role of the big labs continue to change? And what will it actually take for consumer AI apps to break out at scale in 2026? Timecodes: 0:00 Introduction & Market Overview 0:35 Who Won Consumer AI in 2025? 1:22 Major Model and Product Launches 2:24 Image and Video Model Innovations 4:05 Product Sensibility and User Experience 6:40 Advances in Image and Video Models 9:11 Under-hyped Products and Productivity Apps 10:21 Prosumer Tools and Power User Workflows 12:56 Gemini vs. ChatGPT: Distribution and Brand 14:04 Product Nuances: Onboarding and Engagement 16:09 Social Features and Group Chat 19:26 Sora, TikTok, and the Status Game 21:02 Challengers: Claude, Perplexity, Grok 23:37 Meta, Grok, and Rapid Model Progress 26:54 Predictions for 2026: Enterprise, Apps, and Multimodality 32:02 Startup Opportunities and App Generation 36:27 Favorite Products and Recommendations 42:19 Building Consumer Products in 2026 Resources: Follow Anish: https://twitter.com/illscience Follow Olivia: https://twitter.com/omooretweets Follow Bryan https://twitter.com/kirbyman01 Follow Justine: https://twitter.com/venturetwins Stay Updated: If you enjoyed this episode, be sure to like, subscribe, and share with your friends! Find a16z on X: https://twitter.com/a16z Find a16z on LinkedIn: https://www.linkedin.com/company/a16z Listen to the a16z Podcast on Spotify: https://open.spotify.com/show/5bC65RDvs3oxnLyqqvkUYX Listen to the a16z Podcast on Apple Podcasts: https://podcasts.apple.com/us/podcast/a16z-podcast/id842818711 Please note that the content here is for informational purposes only; should NOT be taken as legal, business, tax, or investment advice or be used to evaluate any investment or security; and is not directed at any investors or potential investors in any a16z fund. a16z and its affiliates may maintain investments in the companies discussed. For more details, please see a16z.com/disclosures.

OMOlivia MoorehostBKBryan KimhostAAAnish AcharyahostJMJustine Moorehost

Dec 29, 2025·43m·Watch on YouTube ↗

📖 CHAPTERS

1. 1

   Consumer AI market snapshot: signs of winner-take-most

   The team frames 2025 as the year big model providers pushed aggressively into consumer, and asks whether general-purpose assistants are consolidating into a small number of winners. They cite usage and paying behavior data suggesting most consumers stick to one primary assistant, with ChatGPT still far ahead—though momentum is shifting late in the year.

2. 2

   Who ‘won’ consumer AI in 2025: incumbents vs. fast-changing momentum

   They benchmark the leader (ChatGPT) against challengers’ relative usage, and discuss how quickly the competitive landscape can turn with a viral model or distribution lever. The conversation highlights Gemini’s accelerating growth versus ChatGPT’s slower growth rate, and the idea that different players may “own” different user segments.

3. 3

   Big 2025 launches: OpenAI’s ‘inside ChatGPT’ strategy vs. Google’s many surfaces

   Justine contrasts how OpenAI and Google shipped consumer functionality. OpenAI largely consolidated features inside ChatGPT (with Sora as a notable standalone), while Google spread experiences across Gemini, AI Studio, Labs, and standalone sites—enabling more tailored UIs but also fragmentation.

4. 4

   Image & video models went viral: from ‘Ghibli moment’ to NanoBanana, Veo, and Sora

   They argue the most viral consumer breakthroughs in 2025 were in image and video generation rather than text. OpenAI’s image generation (the “Ghibli moment”) and Sora competed with Google’s Veo and NanoBanana releases, driving new waves of mainstream experimentation.

5. 5

   What actually improved in multimodal: realism, consistency, and ‘reasoning’

   The team explains how image/video models progressed from style/aesthetics toward realism and detail-level coherence. They highlight improved multi-input reasoning (multiple images + text), better text rendering (infographics), and character consistency that encourages iterative creation.

6. 6

   The under-hyped unlock: search + accuracy inside creative generation

   Anish argues NanoBanana’s most underrated advantage is search integration, which boosts factual accuracy for historically correct or product-accurate images. They relate this to Veo’s virality, where adding audio alongside video made outputs feel more complete and shareable.

7. 7

   Under-hyped productivity primitives: Pulse and connectors (but execution gaps)

   They discuss OpenAI’s attempts to become more proactive and integrated into daily workflows through features like Pulse and connectors to calendar/email/docs. While the primitives are compelling, they note reliability and UX issues that limit daily adoption so far.

8. 8

   Prosumer tools & power-user workflows: Perplexity’s Comet browser as a standout

   Olivia calls Perplexity’s Comet browser her most-used impressive product of the year, even though she doesn’t use Perplexity as her main assistant. The key is agentic browsing plus reusable workflows that run on schedules or triggers, beating even ChatGPT’s browser (Atlas) on sustained interest in their view.

9. 9

   Gemini vs. ChatGPT: distribution and brand—plus the importance of first-step UX

   They debate whether Gemini can catch ChatGPT, noting Google’s distribution advantages (Android, Chrome, Docs/Gmail) but ChatGPT’s brand dominance as the default ‘Kleenex’ of AI. Product sensibility matters: ChatGPT’s trending prompts/templates lower activation energy, while Gemini’s blank-slate UI can confuse users.

10. 10

    Social features in AI: group chat and Sora 2’s TikTok-like feed—bearish on social retention

    Bryan is skeptical that productivity-first assistants naturally expand into social, because the emotional drivers differ (self-improvement vs. entertainment/status/connection). Sora 2 succeeded more as a creator tool than a standalone social network; content tends to spread on existing platforms where consumption already lives.

11. 11

    Challengers’ positioning: Claude for power users, Meta’s hidden strengths, Grok’s rapid climb

    They evaluate challengers as increasingly differentiated. Claude wins hearts among technical users with artifacts/skills and deep work capability but struggles with mainstream discoverability; Meta’s strongest models (SAM 3) are developer-oriented despite consumer DNA; Grok’s image/video progress is described as the steepest slope, paired with entertainment-first bets.

12. 12

    Predictions for 2026: enterprise pull-through, apps ecosystems, and ‘anything-in/anything-out’ multimodality

    The team predicts enterprise adoption and app ecosystems will reshape consumer usage, with ChatGPT’s enterprise push potentially driving default consumer habit. They also expect deeper multimodality—editing and transforming across text/image/video—driven by efforts to unify separate model capabilities into more general systems.

13. 13

    Startup opportunities: opinionated UX, multi-model advantages, compute constraints, and monetization

    They argue labs excel at models and incremental core improvements but often fail at opinionated standalone consumer UIs—leaving room for startups. Startups can also be multi-model (best tool per task) and avoid the labs’ compute tradeoffs between viral entertainment and serious inference; monetization is shifting with usage-based expansions yielding >100% net revenue retention.

14. 14

    What to try today: recommended products and workflows for builders and users

    They close by sharing specific tools worth experimenting with to understand the current frontier. Recommendations span multimodal ad generation, multi-model creative suites, audio reading, slides, meeting notes, AI-native browsing, and app generation/coding tools.