AI-native startups are poised to disrupt the $12.3 trillion US services sector by creating innovative applications for industries like healthcare and legal services, which have traditionally been slow to adopt technology. A Bank of America report highlights how these startups are emerging as pivotal players, reminiscent of the early days of the Internet in 1996. Companies like Hippocratic AI and vLex are leveraging massive language models to revolutionize specific domains. Hippocratic AI, co-founded by Munjal Shah, focuses on automating non-diagnostic healthcare tasks such as determining the necessity of ER visits or identifying potentially harmful medications. Shah emphasized the cost-efficiency and high satisfaction rates of these AI agents, which operate at $9-10/hour compared to the $50-90/hour costs for human nurses. Meanwhile, vLex applies similar AI technologies in legal services, enabling faster preparation for lawsuits and reducing weeks-long tasks to mere minutes.
The broader implications of these advancements suggest a growing challenge for traditional labor markets as AI agents demonstrate superior efficiency and cost-effectiveness in various tasks. Shah noted that AI-driven automation could replace many roles, such as paralegals, legal assistants, and nurses, as the technology matures. Startups like Hippocratic AI and vLex exemplify a shift from generic AI applications in sales and customer service toward specialized, industry-specific tools. By addressing vertical markets, these AI-native businesses enable companies to overcome barriers to adopting AI, potentially reshaping the services sector. As this trend continues, AI is expected to transform corporate workflows, making it increasingly difficult for traditional services to compete without integrating similar technologies.