- Investors have started pouring money into the generative artificial intelligence space.
- Entrepreneurs are encouraged to look at generative artificial intelligence as a tool to solve a myriad of problems.
- This year will be the year in which new ways of using generative artificial intelligence will thrive.
As ChatGPT goes viral and “generative artificial intelligence” becomes a buzzword, many VCs are looking to invest in the space.
If the early 2010s were the era of “It’s like Uber, but for (fill in the blank)” startups, we may be entering an era of founders explaining why their companies are like ChatGPT, but for, well, everything.
Content creation firm Jasper uses the technology behind ChatGPT and raised $125 million in Series A in October, valuing the company at $1.5 billion. Jasper competitor Copi.ai, which uses ChatGPT for marketing, raised $11 million in Series A in October 2021.
There is generative AI for healthcare, with startups like physician-focused Atropos Health and synthetic healthcare company Sintegra raising funding in the past 12 months. AI-powered video editing startup Runway raised a $50 million Series C in December, while AI-enhanced design Creative Fabrikue raised $61 million in January 2023. In education, there’s AI instructional feedback startup TeachFX, which raised $10 million in September, and AI-enhanced textbook company Prof Jim with a $1 million seed round in January 2022.
And there’s more to come, said Luke Capital partner Grace Isford.
“We are at an exciting inflection point for artificial intelligence – we are just the tip of the iceberg for the many vertical use cases of large language models from creative industries to spaces such as biology, manufacturing and healthcare,” Isford said. “We will probably reach a point where AI will be seamlessly integrated into everyday workflows.”
The beauty of recent generative AI models is that they are available to other companies. OpenAI, operator of ChatGPT and DALL-E, is working with Jasper, Copi.ai and mental health startup Koko, among others.
A flood of new companies
As access to generative AI models becomes easier, founders can launch their “ChatGPT, but for plant lovers” idea much faster than before. For many investors, that’s a good thing. They believe that generative artificial intelligence can become as ubiquitous as the cloud or the Internet.
But going forward, there is a risk that startups will use ChatGPT for ChatGPT’s sake. Not all generative AI companies are long-lived, and not all sectors have problems that generative AI can solve.
When Uber began its rise, suddenly there was an Uber for pets — the pet-people-hailing app SpotOn — and an Uber for groceries like Gethir, but few became as successful or transformative as Uber.
For now, investors are confident that their bets on generative artificial intelligence will pay off, said Josh Constine, a partner at Signal Fire.
“As with most trending sectors, there are companies that are worth or will be worth much more, and many others that will never live up to their hype,” Constine said. “But unlike some past cycles where utility seemed speculative or at least many years away, we’re already seeing traditional jobs transformed by the breadth and efficiency of generative AI.”
It’s still early days for generative AI, and there will be more new use cases that companies will come up with for this technology.
Eventually, generative AI will lose its luster and startups will have to sink or swim the same way any company does: consistent revenue and profit. But enough of being noisy for now.