LinkedIn co-founder warns investors that AI chatbot market is now saturated

Reid Hoffman, the investor and co-founder of LinkedIn, has declared that the opportunity to back AI chatbot platforms has passed, urging investors instead to turn their attention to artificial intelligence in medicine, which he described as a "massively larger total addressable market" that is still in its early stages of disruption.

Chatbot market already entrenched

Speaking on The Possible Podcast this week, Hoffman argued that dominant chatbot platforms are now firmly established, with OpenAI and Anthropic having captured both investor attention and significant market share to the point where new entrants face a considerable uphill battle.

Despite investors continuing to be "googly-eyed" about Anthropic's growth — its run rate having surpassed $47 billion this month — Hoffman cautioned that the scale a market achieves does not necessarily mean sufficient space remains at the top for new competitors. "Now it's the time for medicine," he said.

Manas AI and the drug discovery opportunity

Hoffman is the co-founder of Manas AI, a biopharmaceutical company that applies artificial intelligence to drug discovery.

The company's mission statement describes its aim as building a "drug discovery factory for monopolies" — an intentionally provocative framing of what the organisation represents.

New drugs typically benefit from 20-year patent protection, allowing them to generate revenues worth billions of pounds over their lifecycle.

Hoffman argues that AI has the potential to dramatically accelerate the early stages of this process, making research quicker, less expensive, and more efficient than has been possible over the past several decades.

Room for multiple winners in pharma

Whilst the AI chatbot space has become concentrated around a handful of dominant platforms, Hoffman believes the healthcare sector will follow a different trajectory.

Pointing to the example of GLP-1 drug manufacturers, each generating tens of billions for their own products within the same drug class, he argues that pharmaceutical AI has the potential to produce multiple successful companies simultaneously.

"It's very possible to have a monopoly on your drug and have other drugs even in the same space be really lucrative," he said.

Pushing back on AI layoff narratives

Hoffman has also recently challenged the prevailing narrative that the AI revolution is directly responsible for widespread job losses across the technology sector.

In a post on X, he argued that many tech firms were conveniently attributing mass redundancies to AI when the more accurate explanation was overhiring during the pandemic period between 2020 and 2023.

"It's important not to ignore other factors," he wrote — a measured position that cuts against both AI doom narratives and AI hype cycles at the same time.