Generative AI Startups Attract Investment As Technology Gains Traction Across Industries
In recent years, generative artificial intelligence (AI) has emerged as a game-changing technology with immense potential across various industries. Subsequently, generative AI startups are rapidly gaining traction, and venture capital investors are keen to capitalize on their potential, observes GlobalData.
Pranjali Mujumdar, Disruptive Tech Analyst at GlobalData, comments: “The emergence of ChatGPT served as a pivotal moment for the technology industry, signaling the need for increased innovation and prompting many prominent leaders to expedite the development of their tools. Major tech companies such as Google, Microsoft, Meta, and Salesforce are investing heavily in generative AI research in hopes of achieving a breakthrough that would put them at the forefront of the race.”
Manish Dixit, Practice Head of Disruptive Tech at GlobalData, comments: “Generative AI can give businesses a strategic advantage by improving and supplementing the already well-adopted conversational chatbots and virtual assistants that are AI-enabled in the B2B and B2C space, particularly in the healthcare, travel & tourism, consumer, retail, banking, insurance, and telecoms.”
GlobalData predicts that the global conversational platforms market will experience a compound annual growth rate (CAGR) of 23.3% from 2022 to 2030. This growth will be partly driven by the significant improvement in language models since the release of GPT-3 by OpenAI in 2020, which has broadened the capabilities and applications of conversational platforms.
An analysis of GlobalData’s Disruptor Intelligence Center Deals database reveals a surge of investment activity in Generative AI, with venture capitalists and large tech companies showing interest in this area.
SOCi Inc., which serves as a marketing platform for multi-location brands, has secured $120 million venture financing in March 2023. The capital will be used to develop a range of AI-based marketing products and expand into new markets. Recently, SOCi introduced the “Genius” product that incorporates OpenAI integration into the company’s review response management tool. This innovative feature uses ChatGPT’s natural language model to provide intelligent responses to online reviews in real time.
Google Cloud acquired a 10% stake in San Francisco-based AI startup and ChatGPT rival “Anthropic” for $300 million in February 2023. Anthropic had previously raised $704 million in 2022. Salesforce Ventures is expected to invest in Anthropic as well through its new $250 million generative AI fund.
Microsoft Corp invested a significant $10 billion in OpenAI, the creators of ChatGPT, in January 2023. The investment will expand the partnership between both companies in AI supercomputing and research and independently capitalize on advanced AI technologies.
Jasper, Inc., a US-based generative AI and SaaS-based copywriting application for content creation, raised $125 million at a $1.5 billion valuation in October 2022. The funds will be used to enhance the product, improve customer experience, and expand Jasper’s accessibility to various creator platforms, following the successful integration of Jasper Art.
Mujumdar concludes: “Overall, the sentiment analysis suggests that generative AI is a technology that is both hyped and promising. While there is recognition of its potential benefits, there is also some skepticism surrounding its actual value. The race for generative AI supremacy is in its infancy, and it is yet to be seen which companies will lead the way.”