Building AI start

MALAYSIAN start-ups may find it increasingly easy to build products using artificial intelligence (AI), but creating businesses that cannot easily be displaced by powerful general-purpose AI platforms is becoming more challenging, according to early-stage investor 1337 Ventures.

The venture capital (VC) firm said defensibility is increasingly likely to come from deep industry workflows, proprietary or difficult-to-access data, operational integration, regulatory complexity and domain expertise rather than AI technology alone.

“Building with AI has never been easier. Building a defensible AI company may actually be getting harder. If you understand a hospital workflow, a factory line, financial compliance or an agricultural supply chain better than anyone else, AI can make that insight incredibly powerful. But AI itself cannot be the entire moat,” said 1337 Ventures founding partner and CEO Bikesh Lakhmichand.

The approach underpins 1337 Ventures’ newly launched Request for Startups (RFS) 2026, which identifies seven areas it believes offer opportunities for new businesses: Vertical AI and agentic workflows; fintech, trust and compliance; industrial AI and smart manufacturing; healthtech; food and agriculture; climate intelligence; and semiconductor and hardtech enablement.

Lakhmichand said increasingly capable frontier models mean products that could previously have supported standalone start-ups can now potentially be replicated by general-purpose AI platforms.

The firm is therefore seeking founders with a sufficiently deep understanding of their industries to build products that general-purpose platforms cannot readily replace. It is targeting businesses where RM150,000 to RM500,000 in early-stage capital can fund an MVP, pilot projects or initial customer acquisition.

1337 Ventures has already invested in more than 60 start-ups, including fintech platform Swipey, used-cooking-oil specialist Arus Oil, spacetech company SpaceIn and child-focused financial platform Vircle. Its earlier bets also provide examples of start-ups progressing beyond the accelerator stage. Parking and e-mobility platform ParkEasy counted 1337 Ventures among its early investors before Shell acquired a 50% stake in the company in 2022, buying out early investors including 1337 Ventures. Another Alpha Startups alumna, online cake marketplace Eat Cake Today, developed and validated its proposition through the programme before launching its platform.

More recently, 1337 Ventures was an early investor in Malaysian digital asset exchange HATA, which raised RM31.6 million in a Series A round led by Bybit in April this year. 1337 Ventures exited its investment following the fundraising.

Applications for the latest Alpha Start-ups cohort are open until Nov 8. — TMR