Venture capital firms are targeting the $16 trillion services sector with a strategy that blends AI automation and roll‑up acquisitions. General Catalyst has earmarked $1.5 billion for a “creation” model that incubates AI‑native companies, then uses them to buy mature service firms and boost margins. Portfolio examples include Titan MSP, which received $74 million to develop AI tools and automate 38 percent of managed‑service tasks, and Eudia, a legal‑service platform that leverages AI for fixed‑fee contracts and has acquired Johnson Hanna. Other investors such as Mayfield and solo backer Elad Gil are backing similar approaches. A recent study warns of “workslop”—AI‑generated work that creates extra labor—potentially tempering margin gains, but proponents argue the model’s profitability and the need for specialized AI engineers make it a compelling new frontier for venture capital. Read more →