The rise of AI-powered ventures: How ChatGPT is bringing a new frenzy in start-up ecosystem – Business Today
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If your products or services are not already ‘AI-powered’, maybe you missed the marketing memo. From jackets to toasters to water purifiers, lately everything is powered by AI. And why not, there are no regulations on what can be called ‘AI-powered’. Until then, it’s all free real estate!
This marketing phenomenon is also making its way into the pitch decks of start-ups seeking funding. Vatsal Kanakiya, CTO of 100X.VC, says, “The number of companies applying with AI as an enabler to their business has increased multi-fold in the past six months.”
And investors are buying it too. Despite the overall funding winter in the start-up space, AI start-ups are still hot, as funding continues to flow their way. As per data from Crunchbase, from November 30, 2022 to May 30, 2023—the six months since the launch of ChatGPT—AI start-ups have received a whopping $23.9 billion in funding, while funding for AI start-ups stood at $13.5 billion in the six months before that. This indicates that funding fervour has almost doubled for AI firms, despite the overall drop in funding and the valuation drops across the space.
Not just start-ups, even big tech and other companies are trying to ride the AI gravy train. Microsoft, Google, Meta and others have poured billions of dollars into AI investments, starting an AI arms race of sorts. Not to be left behind, even Indian IT firms have taken a proactive stance, with TCS, Infosys, and Wipro announcing generative AI services and products in the past month.
Now, if you think this is the first time that entrepreneurs, investors, companies and advertisers are performing this buzzword ballet, let’s rewind the clock to the not-so-distant past, when the buzzword du jour was undoubtedly ‘crypto’. Start-ups left, right and centre were vying for a piece of the crypto pie, slinging words like tokenisation, Web3, decentralisation, blockchain, NFT, metaverse, DeFi, etc., everywhere.
Data from Crunchbase shows that from January 1, 2021, to December 31, 2021, crypto start-ups raised a staggering $30.2 billion. Big tech had also made big commitments to crypto. Apple, Amazon, Google, Microsoft—all of them had invested billions of dollars in the crypto, blockchain and metaverse space. Social networking giant Facebook took it a notch higher and changed its name to Meta to bolster its metaverse credentials. The digital asset revolution was just around the corner, ready to burst into our lives, and finance was going to become democratised like never before.
But 2022 rang in rising interest rates, and pushed investors to pull out money from risky assets. Then some major crypto players collapsed—Terra Luna, 3AC, Celsius, Voyager, BlockFi, FTX, etc.—pushing the space into a deeper abyss. The crypto frenzy had faded, and so did the chorus of crypto buzzwords.
Is the buzzword ballet of AI-powered firms different this time around? Are AI companies here to stay, or would they be gone with the wind too? And what will the buzzwords for the next round be? Quantum? Neuro? Or something entirely unexpected?
@aakancvedi
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