AI Investments Shift from Research Institutions to Private Sector, Businesses
Jack Mckendrick of forbes.com has written a piece that says AI is in bad shape when it comes to investment capital, but is in good shape when it comes to investments. What?
As the economic climate cools, so has the pace of investments flowing into the red-hot artificial intelligence technology space, according to a story in forbes.com by Joe McKendrick.He quotes the conclusions drawn by two leading venture capitalists in the tech space, Nathan Benaich of Air Street Capital and Ian Hogarth of Plural, as outlined in their annual summary of the state of AI. The report covers all facets of AI, from developments with DeepMind to NVIDIA’s rapidly expanding processing capabilities. There are also numerous implications for AI from a business perspective.
In just a few sentences, the writer uses the terms cooled somewhat and still red hot. A bit confusing for some of us perhaps. And if you have followed the stock markets lately you can see many of those investors are confused as well.
For starters, it turns out that 2021 was a banner year for the AI business sector, but 2022 has shown a decline. In 2022, investment in startups using AI has slowed down along with the broader market. Private companies using AI are expected to raise 36% less money in 2022 versus the previous year but are still on track to exceed the 2020 level.
“This is comparable with the investment in all startups and scaleups worldwide,” they observe. In addition, they note, “enterprise software is the most invested category globally, while robotics captures the largest share of VC investment into AI.”
The report’s co-authors observe that academic research in AI has plummeted as multi-year project funding concludes, with much of the research now shifted to the commercial sector. That means more startups and scaleups are on the horizon.
“Once considered untouchable, talent from Tier 1 AI labs is breaking loose and becoming entrepreneurial,” Benaich and Hogarth state. “Alums are working on AGI, AI safety, biotech, fintech, energy, dev tools, and robotics.”
Companies that have created image generators have been among the investment winners, according to the State of AI report:
“Small, previously unknown labs like Stability.ai and Midjourney have developed text-to-image models of similar capability to those released by OpenAI and Google earlier in the year, and made them available to the public via API access and open sourcing. Stability.AI’s model cost less than $600,000 to train, while Midjourney’s is already proving profitable and has become one of the leaders in the text-to-image market alongside OpenAI’s Dall-E 2. This demonstrates a fundamental shift in the previously accepted AI research dynamic that larger labs with the most resources, data, and talent would continually produce breakthrough research.”
The article provides the reasons these researchers give for the rise and fall in AI investments and how that change is being brought about in 2022. The AI summary gives in-depth insights into what the experts are seeing and saying about the state of AI.
read more at forbes.com