How Leading AI Startup Investors Approached Artificial Intelligence In 2023

21/12/2023

In a series of interviews with prominent startup investors in artificial intelligence (AI), Crunchbase News delves into the evolving landscape of AI investments. While funding for foundational AI models remains a challenge due to the immense capital required, investors are increasingly interested in tools managing these models and the application-layer software utilizing them for consumers and businesses.

Adoption and Potential

Notably, the rapid and widespread adoption of AI tools like ChatGPT and image-generation models over the past year is seen as a pivotal moment for the industry. Investors foresee the generative AI era unfolding, with ChatGPT, hailed as a significant advancement that has captured the imagination of non-technical users and marked a shift in technology adoption cycles. The interviews reveal a consensus that the AI sector is poised for a mind-blowingly fast adoption curve, likening it to an API call to large language models.

Industry Leaders’ View

According to industry leaders like Jai Das of Sapphire Ventures and Stephanie Zhan of Sequoia Capital, the current evolution in AI is propelled by advancements in models, cheaper storage, and processing power, creating a flywheel effect. The affordability of massively trained large language models (LLMs) contributes to the sector’s growth. Sequoia Capital’s strategy focuses on following developers and talent, while other investors, such as Bessemer Venture Partners and Insight Partners, are seeking companies building domain-specific models on private datasets with exceptional user experiences.

Financial Side

Despite the current expense of AI software, investors anticipate a cost reduction in the next 12 to 18 months as the GPU crunch alleviates, making AI technology more accessible. Overall, investors predict that AI will impact existing companies dramatically and give rise to new entities that redefine industry standards through innovative AI applications.

Read more: https://news.crunchbase.com/ai/startup-investors-bessemer-sequoia-m12-eoy-2023/

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