Artificial intelligence feeds unicorns

Artificial intelligence feeds unicorns

Not everything is OpenAI nor is all generative artificial intelligence (AI) ChatGPT. The fervor for this technology has unleashed investment fever for an ecosystem that in 2022 raised nearly 1.4 billion euros, which means – according to data from the sector itself – multiplying by seven the amount that was raised the previous year. And around this new technology, countless tools have grown, from conversational assistants to powerful early detectors of cancer or diseases. Although all the attention is focused on the company founded by Sam Altman, who by the way was fired last Friday and has just signed for Microsoft.

In just a few months, this emerging company has gone from being completely unknown to the general public to being the company of the moment thanks to its conversational robot based on natural language. With just eight years of life, OpenAI exceeds a valuation of 25 billion euros, although it took only four years to reach the status of a unicorn, an emerging firm with a valuation of more than 1 billion euros.

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In the heat of this ‘fever’, numerous startups have appeared. “This is much more realistic than the boom experienced with the metaverse, or the IoT, or the autonomous car,” says Fernando Zallo, director of Esade BAN. “No, there is no bubble in artificial intelligence,” adds Ángel Barbero, professor at EAE Business School.

So far, more than a dozen generative AI companies have reached a valuation of more than one billion euros and they have done so thanks to the OpenAI tool, either due to the popularization of their tool or because they have left the workforce. from Altman’s company.

«There is no bubble in artificial intelligence»

Angel Barber

Professor at EAE Business School

This is precisely the case with the second unicorn fed, but not generated, by generative artificial intelligence: Anthropic. Founded in 2021, it already has a valuation close to 4 billion euros and behind it is a former director of OpenAI, Dario Amodei.

Today, the company focuses on the development of Claude 2, an alternative artificial intelligence chatbot to ChatGPT that is already being used by popular services such as Slack or Notion. The counterpoint of the popular assistant that has helped Google not to be left behind in this technology and has acquired 10% of Anthropic in exchange for about 300 million euros.

In the last half year, several generative artificial intelligence startups have entered the unicorn club. This is the case of Runway, one of the two companies behind Stable Difussion, an artificial intelligence model that generates images from text. This company has tripled its valuation in just half a year to 1.5 billion euros. “This technology is overwhelming,” says Zallo. “What we are seeing as ChatGPT users is something very generic, but the opportunities they offer in specialization are enormous,” explains Barbero.

Investment without brakes

After the failure in the cryptocurrency and blockchain sector and the doubts with the metaverse, investors have found the new ‘toy’ to get excited about.

The hope that AI will be the next big thing has created FOMO, or fear of missing out, among investors. In the last three years, investment by venture capital firms in this technology has increased 425% since 2020, according to PitchBook data, even as the technology market in general declines and large firms in the sector face numerous layoffs in their workforces.

Despite the situation of economic and geopolitical uncertainty, the siren song of artificial intelligence has hooked investors and the flow of money to companies related to this technology has not slowed down.

In 2023 the generative artificial intelligence sector already accumulates 14,000 million euros in almost 90 financing agreements

In 2023, the generative artificial intelligence sector will already accumulate 14 billion euros in almost 90 financing agreements. “We must remember that we are still talking about a largely incipient segment,” says Zallo.

Thus, names of emerging companies related to generative AI have entered the investment catalogs of large firms. According to María Angeles Barba, News Trends analyst at Wayra (Telefónica), right now the most interesting investment would be found in an intermediate layer, that is, ‘startups’ that are responsible for the integration of generative AI in companies to enhance redesign, make more efficient and its traditional processes.

But the investment appetite does not only appear in investors or venture capital firms, the big technology companies in Silicon Valley have also taken out their checkbook to not miss out on this new trend: Apple, Microsoft, Amazon, Google and Meta are already fully involved.

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