Silicon Valley investors have gone crazy with artificial intelligence after ChatGPT’s seismic breakthrough a year ago. They’re constantly searching for the next big thing amid a sea of hype and overpromising.
With ChatGPT, which can develop computer code, write stories, draw drawings, and more with simple text inputs, OpenAI ignited a generative AI frenzy.
Venture investors have immediately doubled down on artificial intelligence (AI), a new promised land in the never-ending chase for massive tech riches, after being hurt by the failures of cryptocurrencies and other failed Silicon Valley fads in recent years.
After meeting with a number of investment fund directors, Denis Barrier, co-founder of the venture capital firm Cathay Innovation, told AFP that for the large investors, “if it’s not AI, it’s not worth it.”
“Funds are looking to make big moves,” Barrier said.
“And that’s pretty unlikely outside AI in the next few years.”
While budget cuts and layoffs became commonplace at internet companies last year, according to market tracker Crunchbase, startups in the AI space attracted close to $50 billion from investors.
During the initial phase of the AI boom, a lot of capital was allocated to businesses creating the massive language models that enable generative AI capabilities.
PitchBook reports that a record $29 billion was invested in generative AI in 2023.
“Cost lives”
However, the computational requirements of creating foundational models from scratch are quite high, and the majority of funding for this kind of work can only come from the wealthiest investors, like Google, Microsoft, Amazon, and Nvidia, and goes to select groups like Anthropic and OpenAI.
This week, Microsoft announced that Mistral, a burgeoning French startup creating its own models, had raised further funding from some of Silicon Valley’s wealthiest investors, including Nvidia and Andreessen Horowitz, one of the industry’s most assertive companies.
“We believe that any slowdown in AI will cost lives,” wrote the rock star venture capitalist Marc Andreessen last year in his “Techno-Optimist Manifesto.”
However, many venture capitalists have shifted their focus to more narrowly focused AI businesses that have the potential to disrupt the banking, healthcare, energy, and other industries because they are intimidated by the cost of entry.
Recently, Bioptimus, a French biotech startup using AI to develop novel medications, received funding from Cathay.
Barrier indicated in his downtown office with a view of San Francisco Bay that Cathay looked at engineering skill, data access, cost restrictions, and a goal to alter a sector while searching for promising startups.
Barrier stated, “You have to have a little faith.”
‘For real’
Last week, Loora, an Israeli firm that teaches English through generative AI, raised $12 million.
With a price tag that is comparable to a Netflix membership, over 15,000 users have downloaded Loora’s mobile applications, which teach English through conversation.
From his Tel Aviv headquarters, Loora co-founder Roy Mor told AFP that simply embracing AI is not going to attract investors.
According to him, what businesses really need is more of the appropriate data to enhance the app and user experience.
“I think the use cases where AI really brings value, where it solves problems, are not yet widespread,” he stated.
As of right now, the business sector holds the greatest promise for returns on investment, which is why a lot of startups are concentrating there.
The leader in large-scale data analysis, or the core of artificial intelligence, Alembic, recently raised $14 million.
The startup assesses marketing campaign efficacy using methods initially created to analyze health data during the coronavirus outbreak.
Jeffrey Katzenberg, the co-founder of DreamWorks and former chairman of Walt Disney Studios, founded WndrCo, a venture capital firm that is supporting Alembic.
“AI is real,” the former high-ranking Hollywood official told AFP.
“It’s not an evolution, but a revolution, a positive revolution.”
Entertainment4 weeks ago
Business4 weeks ago
Technology4 weeks ago
Technology4 weeks ago
Entertainment4 weeks ago
Entertainment4 weeks ago
Entertainment3 weeks ago
Entertainment3 weeks ago