AI offers startups an opening, but business acumen still key, says Trust Center head
MIT has had the highest undergraduate founder count per capita over the past decade
Samuel Yuan–The Tech
Long before Bill Aulet SM ’94 returned to MIT to direct the Institute’s entrepreneurship center, he was at IBM, right at the dawn of the personal computer revolution, when Apple and Microsoft were just fledgling startups.
Now the Managing Director of the Martin Trust Center for MIT Entrepreneurship and a Professor of the Practice at the MIT Sloan School of Management, Aulet has seen much of the technology industry’s history up close. And he says that building successful technology startups is as much, if not more, about business acumen as it is about invention.
Referring to the history of Silicon Valley, Aulet pointed out that while companies like Apple, Google, and Meta just “laterally innovated” many of their key technologies, their success could largely be attributed to their ability to recognize underutilized technology and commercialize them. For instance, Apple was instrumental in bringing the graphical user interface (GUI) to customers, an innovation that originated at Xerox PARC.
“Innovation is invention times commercialization. So if you have someone who’s just a good hustler, but they have no technical aptitude, then invention is zero and you get nothing,” Aulet said. “But at MIT, they do invention, and they sometimes don’t figure out how to commercialize it.”
Reading the market
Aulet reasons the importance of the Trust Center’s programs and classes — like MIT delta v, StartMIT, and the Venture Engineering class (15.373) — comes from the need for both market literacy and technological aptitude. He believes that this is especially pertinent for student founders, as artificial intelligence (AI) represents a new wave of opportunity, just like the PC and the internet before it.
“We’re not there to grab a piece of their company. When you come to MIT, all this stuff’s free,” Aulet said. “We’re teaching people to get better so their odds of success are higher, and even if they fail, they’re still going to learn a ton.”
Aulet also remarked that while one of the best ways to start a successful startup is to solve a problem that one sees, building a “highly scalable company” is still very different from “product hacking” or building “stuff like a science fair project.”
MIT’s startup scene
Like Aulet, many students at MIT are similarly interested in entrepreneurship. According to data from Pitchbook, MIT now ranks fourth and third in terms of the number of undergraduate and graduate founders, respectively.
Moreover, by The Tech’s calculations, out of the ten American universities that produce the most entrepreneurs, MIT has had the highest undergraduate founder count per capita over the past decade. It also has one of the highest graduate founder counts per capita, second to only Stanford.
While Silicon Valley is thousands of miles from Cambridge, Massachusetts, many of the most prominent AI startups located there — such as OpenAI and Cursor — were founded, in part, by individuals affiliated with the Institute.
An AI bubble?
Despite the meteoric rise of AI startups over the past few years, there has recently been growing skepticism about their success. For instance, a Nov. 22 Wall Street Journal article reported lower-than-usual investor enthusiasm for Nvidia’s Q3 2026 earnings. The article also cited Nvidia’s deal with AI startup Anthropic, concluding that the AI environment was “worsening” but that the “the AI bubble” would not “pop” just yet.
Last month, a New York Times article analyzed the circular nature of OpenAI’s deals and investments, noting how these complex transactions induced some fear in investors. Some believed that the San Francisco-based company was “inflating a potential financial bubble” while still building a “highly speculative technology.”
Looking long-term
Still, many familiar with the history of the technology industry remain confident in AI’s future.
Paul Wesling, Life Fellow and Distinguished Lecturer of the IEEE who gave a presentation on Silicon Valley history for the Stanford Historical Society, wrote in an email to The Tech that “AI will be just like previous Silicon Valley innovations and productizations and will again drive improved productivity and GDP for America.”
Wesling cited a Wall Street Journal op-ed by former Federal Reserve Board member and Distinguished Visiting Fellow at the Hoover Institution Kevin Warsh to illustrate how AI represented just the latest iteration of “Silicon Valley dynamism” and “American ingenuity.” He said that this innovation burst was spurred by individual builders and risk-takers enabled by a “deregulatory agenda.”
Meanwhile, Aulet said that AI might be similar to the dot-com bubble in the sense that there will be “some huge winners” but also many losers. While sites like Pets.com were failures, companies like Amazon also emerged from the bubble.
Aulet also believes that tech giants are currently “placing massive bets” in AI to remain relevant in the industry in the long term. In some sense, he feels that they are learning from IBM and are accordingly much more “paranoid” about survival.
“We at IBM invented the technology that ultimately killed us,” Aulet said. “We could not imagine that somebody else could steal the computer. It’s just unfathomable.”
Aulet specifically referred to Google’s venture-capital-like investment strategy as proof of this idea. He noted that Google’s investment in Android and mobile paid off for “100 other” investments. Furthermore, he added that if Google can move from the last curve to this curve of AI — for which they’ve also invented a core technology in the form of the Transformer — then it will “be such a testament to Google.”