Despite these concerns, investment in the AI sector is not expected to halt completely. While some AI startups have struggled to raise funding, others, like Essential AI and Vast Data, have successfully secured large rounds. The involvement of Big Tech in funding rounds has been a significant factor in these successes. However, the rising market could cause venture firms to reconsider their investments, particularly as they shift their focus towards startups with solid financials.
Key takeaways:
- Generative AI and AI-related startups raised nearly $50 billion in 2023, with some companies like OpenAI, Anthropic and Inflection AI, raising billions of dollars individually.
- Despite the overall slowdown in venture investment, the AI sector saw a significant increase in valuations, with OpenAI reportedly in talks to sell shares at a $90 billion valuation by the end of 2023.
- There are concerns among investors about the number of winners in the AI sector, with some suggesting that big tech companies with access to data, computing power, talent, and deep pockets may end up being the biggest winners.
- Regulatory issues are another challenge for the AI sector, with the European Union setting new rules for AI development and the Federal Trade Commission scrutinizing Microsoft's investment in OpenAI for potential antitrust violations.