If you're wondering where the artificial intelligence boom goes after chatbots and image generators, Lu Zhang has a couple of ideas: look to the stars and look to your doctor's office.

Zhang, the founder and managing partner of the Silicon Valley venture capital firm Fusion Fund, recently shared her outlook on the startup and AI landscape. Her firm typically backs AI, data-driven, and deep-tech startups, with a sweet spot for fintech AI, digital medicine, and automation. Right now, she's most excited about two specific frontiers: health care and space.

Let's start with health care, because the numbers are kind of wild. Zhang points out that during January's JPMorgan Healthcare Conference, it was reported that a staggering 200 million users of ChatGPT submit health care-related questions each week. That's 40 million people asking the AI about health every single day. It's a clear signal of massive, pent-up demand for better information and tools.

"AI tech leaders are realizing the health care sector has some of the highest-quality data with the most diverse use cases," Zhang said. "That's why I am very passionate about health care AI. I feel like it's doing the right thing in a smart way. It's not only about creating financial returns, but also about improving our quality of life."

The big players are already on it. Microsoft recently launched Microsoft for Healthcare, which uses AI to try and improve patient engagement and data security. Google is also actively investing in and developing AI health care tools. The thesis is simple: automation in health care can transform daily life, and the data is there to make it happen.

Then there's the final frontier. "I remain very bullish on the sector," Zhang said of space. She sees SpaceX as "the foundation of the space industry," and believes the industry is now large enough to support a whole ecosystem of AI startups. She predicts a significant increase in space-related technology over the next two to three years.

Why? Projects like Starlink are enabling the collection of vastly more space and satellite data through edge devices. At the same time, Zhang sees major opportunities for AI-powered robotics in space—a field she expects to grow rapidly over the next decade.

The Software Question Mark

All this AI talk inevitably leads to a big, scary question for a lot of companies: what happens to software? Is software-as-a-service (SaaS) going to become irrelevant as AI gets smarter?

Zhang thinks the market needs to have a more nuanced discussion. "I think the discussion we need to have is what will the business model be in the future for software powered by AI agents," she said. "In the future, the business model will probably be different. This is definitely a big question mark for existing software companies as to whether they can make this transition themselves."

Her take is that the market has it backwards right now. We've overestimated how quickly AI will be integrated into everything, but we're underestimating how profoundly it will change business models in the long run. For now, she notes, AI simply isn't advanced enough to replace software. Full market integration will likely take a couple of years.

And before we get there, there are some very real hurdles. "Just think about all the security integration, all the edge cases, and the consequences of using AI agents," Zhang cautioned. "We really need to make sure that [compliance] is available outside of the consideration of the technology." In other words, we can't just build cool tech; we have to figure out how to make it safe and reliable.

Deploying Capital in a Dynamic Year

So, what's her firm doing about all this? It's going to be a busy year. Fusion Fund plans to make seven to 10 investments in early-stage startups. "This year, the market is very dynamic, and there are a lot of changes happening," Zhang said. "We're going to focus on deployment [of capital] and invest in new companies."

Last year, the firm invested in 10 early-stage companies, including Medra, Reality Defender, Starpath, Memories.ai, and Zeroport. And they've just raised more firepower to keep going.

Last week, Fusion announced its fourth early-stage venture capital fund, Fusion Fund IV. The new fund, which has $190 million in committed capital, will focus on the challenges and opportunities popping up as health care, enterprise, and industrial technology sectors rapidly digitize. With this new fund, Fusion Fund now has more than $500 million in total assets under management.

The message from Zhang is pretty clear: the AI story is moving from the obvious, consumer-facing applications to deeper, more complex industries. The next boom might not be in your phone's chatbot, but in the satellite overhead or the software that helps manage your health. It's a shift from talking to AI to letting it do things in the real world, and that's where the real transformation—and the real investment opportunities—might be hiding.