Generative AI: The New Frontier For VC Investment

Growing up in India, there was a widely held belief that calculators diminished one’s math ability. We were never allowed to use them and were forced to use log books for multiplication and division. The idea was that by repetition of basic building blocks, students would develop strong math skills.

In short, the more sophisticated your job (as demonstrated by the skills and education required and by your compensation), the more LLMs can help you, potentially even replace you. (See here for my recent summary of predictions regarding the impact on creative jobs). CB Insights observes that generative AI could reduce design timelines by up to 90% for infrastructure projects and slash raw material use by upwards of 95% in industrial design. The addition of automation to customer service processes is nothing new. But a raft of AI startups are working to further lessen the human labor needed for this crucial business function. Another one to watch, Tokyo-based Soundraw, pulled in $1.4 million in seed funding last summer to develop its technology, which creates music using AI that can be replayed and distributed without royalty payments.

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As the chief innovation officer at a product development services company, it would be easy for me to take the same view and to see generative AI as an existential threat. However, this perspective Yakov Livshits overlooks the true potential of generative AI in this context. Instead of rendering coding skills obsolete, it shifts the nature of programming tasks and greatly increases our throughput.

• Customers agree to indemnify Stability in the event intellectual property claims are made against songs created with Stable Audio.
• The Stanford Accelerator for Learning and the Stanford Institute for Human-Centered Artificial Intelligence invite proposals for innovative designs and/or research on critical issues and applications of generative AI in learning contexts.
• US-based companies represented 33% of exits, and Asia’s share was 17%.
• The platform includes Writer-built LLMs, Knowledge Graph to integrate with business data sources, and an application layer of chat interfaces, prebuilt templates, and composable UI options.

The cost of generating images, 3D environments and even proteins for simulations is much cheaper and faster than in the physical world. One is generating (for instance images) while  the second is verifying the results, for instance if the images are natural and look true. Neural networks can generate multiple proteins very fast and then simulate the interactions with various molecules to discover drugs for different diseases. There are already attempts to use text generation engine’s output as a starting point for copywriters.

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Likely due to the capital-intensive nature of developing large language models, the generative AI infrastructure category has seen over 70% of funding since Q3’22 across just 10% of all generative AI deals. Most of this funding stems from investor interest in foundational models and APIs, MLOps (machine learning operations), and emerging infrastructure like vector database tech. Generative AI, much like other transformative technologies before it, has the potential to enhance our knowledge and productivity, similar to how search engines like Google revolutionized information access. In this article, I’ll explore why generative AI should be seen as a tool that empowers humans and allows us to tap into newfound realms of creativity rather than diminishing our capabilities. It’s similar to the model being pursued by Adobe and Shutterstock with their generative AI tools, but Stability wasn’t forthcoming on the particulars of the deal, leaving unsaid how much artists can expect to be paid for their contributions. ChatGPT has captured the imagination of millions of people with its ability to do things like answer questions, write term papers and poetry, and generate computer code.

Yakov Livshits
Founder of the DevEducation project
A prolific businessman and investor, and the founder of several large companies in Israel, the USA and the UAE, Yakov’s corporation comprises over 2,000 employees all over the world. He graduated from the University of Oxford in the UK and Technion in Israel, before moving on to study complex systems science at NECSI in the USA. Yakov has a Masters in Software Development.

The company’s chatbot, named Claude, is being tested in closed beta and is not yet available to the public. According to a recent report in the Financial Times, Anthropic recently received $300 million in funding from Google. Stability AI, the developer of text-to-image generator Stable Diffusion, is reportedly talking to investors again after raising $101 million in seed funding in October. The company, which was previously valued at $1 billion, is seeking a $4 billion valuation this go-around, according to Bloomberg.

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OpenAI is also developing a language model to power a new version of Microsoft’s Bing search engine and Edge web browser. Perplexity AI, a start-up created by former employees of OpenAI, Google and Meta, is raising $20 million to $25 million, led by NEA, that values the Yakov Livshits company at about $150 million, two people familiar with the situation said. And LangChain, a start-up working on software that helps other companies incorporate A.I. Into their products, has raised funding from Benchmark, a person with knowledge of the matter said.

The result of more than a decade of research inside companies like OpenAI, these technologies are poised to remake everything from online search engines like Google Search and Microsoft Bing to photo and graphics editors like Photoshop. Anthropic, a San Francisco artificial intelligence start-up, is close to raising roughly $300 million in new funding, two people with knowledge of the situation said, in the latest sign of feverish excitement for a new class of A.I. Anthropic specializes in generative artificial intelligence, a hot investment in Silicon Valley. While venture funding decreased by 19% from Q3’22 to Q4’22, AI funding increased 15% over the same period, according to CB Insights’ State of AI 2022 Report (annual AI funding dropped by 34% in 2022, mirroring the broader venture funding downturn).

Student seed grant project periods must start no earlier than April 3, 2023 and finish by April 3, 2024 or end of quarter of graduation, whichever is earlier. Clarke Pennington ‘23 is an MBA candidate at Columbia Business School. Clarke has a keen interest in investing and entrepreneurship at the intersection of emerging technologies. Is Generative Artificial Intelligence the next watering hole for Venture Funds? According to Pitchbook, Venture Capitalists have increased investment in Generative AI by 425% since 2020 to $2.1bn.