Zerodha co-founder Nithin Kamath has cautioned startup founders that claiming to use AI is no longer a unique selling point. He argues that AI is now a basic expectation rather than a competitive advantage. For investors, this marks a shift where the focus has returned to core business fundamentals, unit economics, and genuine problem-solving, rather than superficial buzzwords in funding pitches.
Nithin Kamath, the co-founder of Zerodha, has issued a blunt warning to startup founders regarding their fundraising strategies. In recent commentary, Kamath highlighted that using phrases like "we use AI" to open an investment pitch is no longer effective and may even be counterproductive in the current funding environment.
Why AI Claims Are Losing Impact
Kamath described the overuse of AI in startup pitches as "ridiculous," noting that for many investors, these claims have become background noise. He compared bragging about AI integration to claiming that a business uses the internet or electricity—it is now a basic expectation, or "table stakes," for any modern company, not a differentiator that sets a business apart from its peers.
For investors, the sheer volume of startups claiming to leverage artificial intelligence has led to skepticism. When every pitch deck highlights the same technology, it fails to provide the unique competitive advantage or "moat" that venture capitalists are looking for. Instead of excitement, these generic claims often trigger eye-rolls, signaling that the founder might be relying on hype rather than actual business value.
The Problem with Automated Pitches
Another layer to this issue is the rise of AI-generated content in the fundraising process itself. Kamath pointed out that because founders are increasingly using AI tools to create polished, professional-looking pitch decks, the presentations themselves are starting to look, feel, and read the same. This homogenization makes it difficult for a startup to stand out in a crowded market.
When a pitch deck lacks a distinct voice or a clear, data-backed business case, it creates an impression of laziness or lack of original thought. Investors are increasingly looking past the design and the buzzwords to identify the core components of a successful business.
Investors Prioritize Fundamentals
In the current market, the shift is clearly moving away from hype-driven narratives and back toward traditional business metrics. Investors are spending more time evaluating unit economics, path to profitability, market size, and customer retention rather than the presence of AI features.
Founders who focus their pitch on genuine innovation—specifically how their technology solves a high-stakes problem that no one else can—are more likely to capture interest. The key message for entrepreneurs is that technology is a tool, not a strategy. Investors are prioritizing businesses that can demonstrate how their product fits into a real-world market, how they manage risks like data security or integration, and how they plan to achieve long-term growth without relying on the assumption that AI will do the heavy lifting. The takeaway for the startup ecosystem is clear: utility and problem-solving now matter far more than the technology used to build the solution.