"Finding Driver" for the Uber of the AI Revolution

Fundrise CEO Ben Miller on breakout AI apps in 2025, the data center "bottleneck," and why we shouldn't expect a wave of AI company IPOs

We’re still in the early innings of the AI revolution but we’ll likely see breakout, consumer-led apps this year, Fundrise CEO Ben Miller told me on Talking Markets yesterday (January 24). Let’s get into it…

The Best of Times, The Worst of Times

The 2 main areas Ben is involved in (real estate and tech) are experiencing vastly different fortunes right now. “It’s the best of times and the worst of times,” he said. “AI couldn’t be better… And commercial real estate is in the doldrums, it really got hit hard by high interest rates.”

More broadly, Ben says the stock market is “definitely pricy. Like all bubbles, it could get bubblier or it could blow up.”

As for what he expects from the new administration, he put it incredibly succinctly: “You can’t forecast a person.” “Forecasting only works with a lot of large numbers, and if '[you don’t have them], then you’re just speculating.”

🪢This jives with what a number of Talking Markets guests have said recently around the difficulty of forecasting this year, including Rosie, Darius, and Mish. Just going to wheel this out again without comment:

Where We Are in the AI Timeline

So we know that history tends to repeat, and that there’s a lot of chatter right now around whether this is 2000 and dot.com this and pets.com that.

So, does this mean it’ll be years before the robot dust settles and we see the winners? Not really, Ben says. Even though AI has only entered the public zeitgeist since ChatGPT came on the scene, and even though it still is super early days, “if you were close to this, the initial breakthrough with innovation in AI is like 2012 or something with AlexNet.”

Here’s how Ben says it usually works:

1. The hardware comes first

2. The platform follows about a decade later

3. And then people start building on top of the platform - with the killer apps (e.g Uber and Airbnb) rarely in the first innings.

So with that timeline in mind, “I think we'll see breakout applications this year,” Ben said. “The innovation moves up the stack. Innovation fundamentally starts in the hardware, then these hardware companies sell to the platforms, the platforms sell to the software engineer and the software engineer then builds applications for the consumer.”

And money is pouring in to innovation (see: Zuckerberg sets Meta’s AI targets for the year, expects to spend $60 billion on growth as one example).

Breakout Applications

The gold rush for AI apps will likely see “10,000 major AI applications that get invented and then maybe 100 go to infinity,” Ben said - so it’s a really high risk space investment wise at the minute.

He does think the first breakout successes will be consumer-led, not least because “it’s hard to have a breakout overnight success in enterprise, because enterprises are so slow to adopt.” If he had to guess, he says the breakout success may be “like an agent that buys stuff for you, does your trips, your tickets - an agent that does a lot of the consumer spending.” And that brings its own layer of difficulty because “a consumer is the hardest thing to call. That’s why Airbnb couldn’t raise money - people thought it was crazy.”

Getting into a stranger’s car seemed nuts too:

On the enterprise side, when it does happen, Ben sees areas like accounting being disintermediated first: “The kind of knowledge work that’s about gathering information and processing it.”

💡”And once it can do accounting, it’ll have the base knowledge of what’s happening in spending in America,” Ben said. “Think about how sad the Fed data is, it’s such a foggy windshield. AI is going to make data so much more transparent.”

Incumbent Risk

Currently, OpenAI, Gemini, Anthropic are the platforms battling it out for AI dominance, Ben says.

Of the older platforms, Ben says “Famously, Microsoft missed mobile and Apple basically missed the internet. These big incumbents can miss one wave, but if you’ve miss two, you’re toast - No one thinks of IBM as the dominant platform now.”

💡“A lot of existing software companies may struggle because AI companies may displace the incumbent,” Ben says. “If AI does your [hotel] bookings for you, then you probably don’t use Bookings.com. There’s a lot of risk to the incumbents here that I think the market hasn’t done a good job pricing in.”

So, A Wave of IPOs Incoming?

If we’re currently in the companies building phase, then you might expect a wave of IPOs to be incoming.

Not so, says Ben. “Most companies aren't looking to go public,” he said, giving 3 reasons:

1. Over the last decade, private markets have gotten so robust that you don’t need to go to the public markets to raise money

2. The stock market is super short-term and companies want to be able to focus on the long-term

3. The public markets don’t want a lot of volatility, and “innovation means you have high volatility, because by definition, innovation is uncertain,” Ben said. “The public markets would demand they transition from being a high innovation company to being a stable, more predictable company.”

Data Centers Are the Bottleneck

There is a, to use an official term, ginormous need for data centers to fuel the evolution of AI, but it won’t be riding to the rescue of beleaguered commercial real estate.

“Unfortunately, these data centers are like building like aircraft carriers,” Ben said. “And you can't build an aircraft carrier in the middle of a downtown city. They’re really extraordinary projects - a small data center is a billion dollars. The data centers and power and all of the physical parts of it is probably the bottleneck for AI.”

Speaking of Real Estate…

Here’s what Ben says are the most important things are in real estate:

1. Interest rates

2. Interest rates

3. Interest rates

4. ???

5. Your first-born

'“Bond yields are what make the real estate industry go round,” he said. “At this point, I’ve been humbled by the amount of unpredictability of interest rates.”

The key question is how much can the country afford higher rates, and Ben’s analysis is that “if rates go above 5%, that breaks the economy and breaks the stock market.”

Just pulling in this quote from Cem Karsan earlier this week here:

In the back half of the year or a little sooner, he sees yields on the long end going to 6-6.5%. “That’s only 1.25 higher from here,” he said. “After, by the way, we’ve moved over 4% higher over the course of 4 years. [If you don’t see that possibility], you’re whistling past the graveyard.” If (or when) it happens, “it will break things,” Cem said. “And then authorities will rush in.”

😐

💡Still, Ben is “optimistic” about real estate. “When things are get cold, it's normally a good time to look at it,” he said. “When you look at industrial or multifamily real estate, it's down 20 % while stock markets are up 60%. You have 80 % difference there. [You would normally expect] a reversion to the mean.”

To watch the full episode, right this way.

Enjoy - and have a great weekend.

Maggie

Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.