14 'Second Wave' startups aiming to take the AI era beyond cost cutting
Business Insider
February 20, 2026
AI-Generated Deep Dive Summary
The article highlights the emergence of Second Wave AI startups, which aim to move beyond traditional cost-cutting applications of artificial intelligence by creating innovative consumer experiences. These startups are focused on leveraging AI to generate new revenue streams and redefine user engagement across various industries. Kylan Gibbs, CEO of Inworld, a leading AI startup accelerator, is at the forefront of this movement. His company has raised over $100 million from major investors like Microsoft and Intel and recently launched an accelerator to support up to 30 Second Wave AI startups.
Among these startups are Luvu, an AI-powered fitness app that uses generative AI for personalized workout feedback; Status, a social simulation game where users role-play in dynamic AI-generated worlds; and Particle, an AI-native news platform that connects stories with relevant insights from podcasts. These examples showcase how Second Wave AI is being applied to create immersive and interactive experiences, moving beyond traditional chatbot integrations.
The significance of this trend lies in its potential to revolutionize industries by fostering innovation and customer engagement. By focusing on new consumer applications rather than efficiency tools, these startups are setting the stage for a future where AI drives creativity and personalization at scale. This shift not only opens up new business opportunities but also underscores the broader impact of AI in reshaping how people interact with technology and each other.
For businesses, understanding this evolution is crucial as it signals a shift toward more consumer-centric AI applications that prioritize user experience and innovation. The rise of Second Wave AI startups highlights the growing potential for AI to transform industries beyond just cost-cutting, offering fresh perspectives on growth and customer engagement in an increasingly competitive market.
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Originally published on Business Insider on 2/20/2026