Generative AI has become the new darling of Silicon Valley venture capital, with a total investment of 9.3 billion yuan in 78 financings in 1 year

Ming Min originated from the temple of Wofei

Qubits | Official account QbitAI

Generative AI, really fired.

Even Silicon Valley venture capitalists, who are in the midst of a technological winter, have poured money into this frontier.

According to PitchBook statistics, in 2022, the investment circle invested a total of 1.37 billion US dollars (equivalent to about 9.369 billion yuan) in generative AI companies, almost reaching the total of the past five years.

Source: PitchBook

Not only are AI companies such as OpenAI and Stability AI that have opened up public awareness, but startups such as Jasper, Regie.ai, and Replika have also begun to emerge, obtaining up to hundreds of millions of dollars in new financing.

There are similar platforms in China that have won millions of dollars in angel rounds.

At the same time, more AI companies are coming, with more than 50 startups receiving seed funding last fall.

450 generative AI companies raised a total of $12 billion

PitchBook data shows that in 2022 alone, there were 78 financing events for generative AI companies, which is in sharp contrast to the sluggish atmosphere of the entire venture capital circle.

This trend can be traced back to AI drawing circles, Dall-E 2, Stable Diffusion have successively attracted the attention of the majority of VCs, generative AI began to become a new favorite in the investment circle.

Perhaps the first to blow the horn was Stability AI.

With the free and open-source Stable Diffusion, the startup raised $100 million in just one month, and its valuation soared to $1 billion.

In September, Sequoia Capital published an article titled Generative AI: A New World of Creativity. It says generative AI has the potential to create trillions of dollars in economic value.

And at the end of the article, he threw an olive branch to start-ups, "can't wait to hear the stories of entrepreneurs in this field."

After that, news about generative AI financing poured in the investment market.

AI text generation company Regie.ai completed its first round of $10 million financing, and the company's main product is GPT-3-based sales copy.

Another similar company, Jasper, also completed its first round of $125 million in funding in the second half of the year, reaching a valuation of $1.5 billion in October.

Similar financing events have occurred in China, claiming to be the first generative AI platform in China, TIAMAT, which completed a multi-million dollar angel round of financing in October.

In November, Descript, which specializes in AI audio editing, raised $5 million for a $575 million valuation of the company, which claims to make audio editing as easy as using Word.

In December, Runway, which specializes in image text generation tools, won a $50 million Series C funding round led by Felicis, valuing the company at $500 million.

It was this month that ChatGPT completely exploded the generative AI craze, and OpenAI was pushed to the forefront.

Last week, the Wall Street Journal and other news that OpenAI is looking for a new round of financing to sell at least US$300 million (about 2.067 billion yuan) worth of shares in a tender offer.

If the deal goes through, OpenAI will be one of the most valuable U.S. startups on the books.

Previously, OpenAI was reported that Microsoft would increase its capital investment; Now its valuation will be as high as about 29 billion US dollars, equivalent to nearly 200 billion yuan.

On the other hand, the number of generative AI companies has long exceeded people's imagination.

According to VC firm NFX, there are about 450 generative AI companies that have collectively raised nearly $12 billion.

But that's just the beginning.

And the venture capital also threw an olive branch to startups, saying that it could provide financial support.

But there are concerns

However, in the context of the "whirlwind" investment attack, some investors have expressed concern.

NEA partner Vanessa Larco said she expects a lot of "noise" in the field because generative AI tools are relatively easy to build backed by a base model.

Indeed, although there are many generative AI companies and products on the market, many of the underlying technologies are models developed by GPT, Stable Diffusion, Dall-E and other large companies.

There are even investors who are starting to think calmly. For example, NFX co-founder James Currier started to buy after investing in 4 generative AI companies.

He said that as the use of generative AI becomes clearer, he fears that hundreds of similar companies will be formed in the future.

At the same time, how to make a profit is still a tricky problem for various generative AI companies.

But the turn of the trend is clearly unstoppable.

According to the New York Times, Radical Ventures is a venture capital firm focused on AI, founded 5 years ago. Its partner, Jordan Jacobs, once said:

For four and a half years, people have thought we are crazy. But in the last six months, they felt we were geniuses.

Reference Links:

[1]https://www.nytimes.com/2023/01/07/technology/generative-ai-chatgpt-investments.html

[2]https://pitchbook.com/news/articles/generative-ai-venture-capital-investment

[3]https://www.nfx.com/post/generative-ai-tech-market-map