Investor Serhiy Tokarev on the features and prospects of vertical AI

Vertical artificial intelligence (AI) may be one of the few promising areas for venture investors in the next 24–36 months, as niche solutions for different regions and business sectors will generate most of the value in the AI market.

“Vertical AI is created to address challenges in specific industries, which makes it more promising than horizontal AI, which is mostly considered a general-purpose tool. The latter is powerful and versatile, but as foundation models continue to evolve, many of them will quickly become obsolete,” says Serhiy Tokarev, founder of the Tokarev Foundation and investor. 

What vertical AI can offer businesses

Horizontal services and companies develop large-scale foundation models and operate in an environment of capital concentration. In 2025, about 60% of investments were directed to large AI labs. 90% of these funds went to mega-rounds, concentrated around a small group of companies, which complicates the building a diversified and scalable strategy for venture funds. 

Vertical AI is developing in a healthier investment landscape. Capital is distributed across different areas, and strong competition arises naturally.

Serhiy Tokarev highlights three areas in which vertical AI has already achieved impressive results: 

• Law. Lawyers often have to spend up to 60% of their time reviewing and processing documents. Vertical AI is a valuable solution for small business services, litigation, and intellectual property — from automated case analysis to contract preparation and patent searches.
• Procurement. In the small and medium-sized business sector, companies that still use Excel and email can utilise vertical AI solutions for smart planning and rapid support.
• Finance. In the field of finance, investors will be interested in accounting and auditing solutions that automate document verification, control testing, and reporting. 

According to the founder of the Tokarev Foundation, since horizontal tools are unable to adapt quickly enough and existing players are lagging significantly behind, vertical AI is perhaps the only niche for venture capital funds. As such, tools are highly specialised, they will soon become an integral part of most financial, legal, and procurement processes. This means that leaders in this category will be determined in the next 2-3 years.