Today, we’re diving into the world of vertical AI agents and their transformative potential. We interviewed Arjun Bhalla, who is an expert in this space and is excited about the revolutionary implications of AI.
Arjun has over 10+ years of experience building Software and AI businesses at tech companies, like ServiceNow, Adobe, and many more through his career in management consulting at Kearney. He is a graduate from University of Michigan and has a deep passion for building game-changing software products and business models.
What does vertical AI mean exactly?
Arjun: Vertical AI refers to AI systems that are tailored to specific industries, functions, or tasks within an organization. Imagine a vertical AI agent replacing a whole team within a business. These agents will understand the nuances of a specific vertical—like healthcare, finance, or logistics—and deliver results that general-purpose AI tools just can’t match. They will be more efficient and capable, and that’s why I think we’re about to see a massive influx of new unicorns in this space.
How did the history of technology, especially the early days of SaaS, influence the growth we’re seeing in vertical AI now?
Arjun: You can actually draw a direct line from the early SaaS revolution to where we are with AI today. When cloud and mobile took off, there was a huge opportunity for startups. But when you look at the billion-dollar companies that emerged, they fell into three categories. The first were obvious consumer products—things like email, calendars, and photos. But the incumbents—Google, Amazon—owned those markets. The second category was consumer ideas that nobody predicted, like Uber or Airbnb. Startups won there because the incumbents didn’t realize the potential until it was too late. The third was B2B SaaS, where we saw the creation of hundreds of companies. Now, the same kind of opportunity exists with vertical AI.
How do you think the rise of vertical AI will change how startups operate, especially when it comes to hiring?
Arjun: We’re already starting to see the impact of LLMs and vertical AI agents on the way startups think about hiring. Traditionally, as startups scale, the number of employees needed tends to grow at the same rate as revenue. But vertical AI can change that. Startups will no longer need to hire thousands of people in sales, marketing, or customer success roles. Instead, they’ll need more engineers who can build and maintain these AI-driven systems. You could have a unicorn company with only 10 employees, running most of the operations through AI agents. I think we’re at the beginning of a revolution where AI agents will replace entire teams.
Will the impact of AI be the same for all companies, or is it more beneficial for vertical companies?
Arjun: Vertical AI will absolutely have a huge advantage over generalized AI. For example, if you think about the software tools used by businesses today, they’re often clunky and complex because they try to do too much. That’s where vertical AI will shine. It’s going to allow businesses to replace the “kitchen sink” approach with highly specialized solutions. For instance, vertical AI could be the key to making payroll systems much more effective, something that’s traditionally been an inefficient process.
What’s your vision for vertical AI agents moving forward?
Arjun: I believe we’re about to see a new wave of vertical AI unicorns. Just like SaaS disrupted traditional software, vertical AI is poised to do the same to the old guard of enterprise software. These agents will replace entire teams in businesses, making operations more efficient, specialized, and cost-effective. The opportunities are massive, and this is just the beginning. We’re on the brink of something truly revolutionary in the tech world, and vertical AI agents will be at the heart of it all.
It’s clear that vertical AI is something we all need to keep an eye on in the coming years. It’s going to be a wild ride!
Disclaimer: The views and opinions expressed in this article are solely those of the interviewee and do not reflect the views or opinions of any current or past employers. This content is for informational purposes only and is not intended to represent or endorse any particular company, organization, or product.
