The piece also notes that while some AI startups have seen disappointing performance and falling valuations, this does not necessarily reflect on the overall potential for returns from AI-related investments. It suggests that in every technology cycle, there are winners and losers, and the current situation with AI companies is no different. The article concludes by stating that despite some high-profile failures, the AI sector continues to attract significant investment.
Key takeaways:
- Despite the hype around artificial intelligence (AI), many AI-focused companies have seen their valuations plummet or have had to shutter their operations. This includes companies that went public during the 2021 SPAC boom.
- Babylon Health, a U.K.-based digital health startup that heavily focused on AI, filed for bankruptcy last month. The company was once valued at over $2 billion.
- Other companies that touted their AI capabilities and have since struggled include BuzzFeed, Metromile, AppHarvest, Embark, and Berkshire Grey. These companies have seen their share prices fall significantly or have had to file for bankruptcy.
- The most highly valued AI-oriented companies to go public between 2020 and 2022 are trading well below their initial offering prices. This trend is also observed in private markets, where some formerly popular AI startups have posted disappointing performance and seen their valuations fall.