The fervor around generative artificial intelligence is contagious among investors.The viral phenomenon that the conversational robot has generated in just half a year OpenAI ChatGPT It has resulted in a dizzying race between the technological giants and has placed the start-ups, mostly Americans, working in this field in the spotlight.
At a time marked by the difficulty for entrepreneurs to obtain financing from venture capital, by the fall in the valuations of many emerging companies and the plans to cut costs, the generative artificial intelligence sector is like an oasis in the middle of the desert. .
According to the ranking prepared by CB Insights, this incipient technology sector has given birth to thirteen unicorns, as companies that reach a valuation of at least US$1 billion are known. Most of them have achieved this status in the last twelve months, which gives an idea of how investor enthusiasm has gone hand in hand with the development of tools, led by ChatGPT, that have brought this technology capable of creating original content closer to the general public.
According to data from Dealroom, generative artificial intelligence start-ups raised US$1.5 billion last year, which is seven times the amount raised the previous year. The aggregate valuation of this group of unicorns soared 64% year-on-year to a total of $21 billion..
The investor interest that began to emerge last year is accelerating at a time characterized by high expectations for a technology that is revolutionary but not without risk. In Pitchbook they confirm that, despite the increasing pressure on venture capital in a difficult economic environment, money continues to flow to generative artificial intelligence companies. According to data from this company, during the first quarter of the year investment agreements were closed in this type of start-up for a total of US$12,380 million.
The number includes the big deal of the year: Microsoft’s $10 billion investment in OpenAI, the big rising star of generative artificial intelligence and creator of the natural language model behind the chatbot ChatGPT.
The Californian company led by Sam Altman has skyrocketed in valuation since it became a unicorn in 201. Right now, it is the most valuable generative artificial intelligence start-up, with an estimated value of US$29,000 million, according to the CB Insight ranking.s.
Golden fever
The feeling that exists in Silicon Valley is that of a gold rush: no one wants to miss the opportunity to enter an emerging business that can give birth to successful companies with which large capital gains can be obtained.
Investors have gone from not paying attention to the few startups working on natural language models a few years ago to actively seeking investment opportunities in the face of collective enthusiasm and the perception that this is revolutionary technology. that can be a turning point in the industry.
Big names like Sequoia, Andreesen Horowitz, Tiger Global, Coatue, Lightspeed or Index Ventures are building a portfolio of investments in generative artificial intelligence start-ups.
Companies that are seen as potential rivals to OpenAI get a lot of investor attention. This is the case of Anthropic, which has developed the Claude conversational robot, and is backed by Google. The company, founded by several former OpenAI employees, just raised $450 million in a funding round. Although its valuation has not been disclosed, it has been leaked that it exceeds US$4,000 million.
Cohere and Hugging Face are another of the two companies that have raised capital in recent months in rounds that have boosted their valuation to around US$2 billion.
In the past half year, several generative artificial intelligence start-ups have entered the unicorn club. This is the case of Runway, one of the two companies behind Stable Diffusion, an artificial intelligence model that generates images from text. This company has tripled its valuation in just half a year to US$1.5 billion.
Another example is Adept, which became a unicorn in March after raising $350 million in its second round of funding. This Silicon Valley company is developing a model that allows software to “speak” in natural language, so that it can translate these commands into executable commands.
The speed with which some of these companies reach $1 billion in valuation is astounding. Character.AI was founded in 2021 by a former Google researcher. Two years later, this conversational robot developer has been valued at $1 billion in a round led by well-known investor Andreessen Horowitz.
Epicenter in the US
The market is dominated by American companies. In fact, in the ranking of unicorns of the artificial intelligence generative, only two start-ups from other regions slip through. This is the case of the British Stability AI, the other company behind Stable Difussion. This start-up is already a unicorn and, as Fortune has revealed, is looking to raise new funds at a valuation of US$4 billion.
Also on the list is Lightricks, known for its AI-based editing apps that is based in Israel.
OpenAI, the company behind ChatGPT
In a matter of months, OpenAI has gone from being a company unknown to the general public to becoming the star of generative artificial intelligence thanks to ChatGPT. This conversational robot based on the OpenAI natural language model has brought the possibilities of this technology to the general public for the first time.
The Californian company, which achieved unicorn status in 2019, is the most valuable start-up in this emerging sector, with a valuation of around US$29 billion.
In January, Microsoft announced that it had closed a multi-year, multi-billion dollar investment in OpenAI. Although the technology multinational has not revealed details, it was leaked that the investment amounts to US$10,000 million, a figure that includes the provision of computing capacity in the cloud, crucial for the business of this type of company. The American tech giant had already invested $1 billion in the company led by Sam Altman in 2019.
Anthropic raises US$450 million
Anthropic was founded in 2021 by a group of researchers, led by the brothers Dario and Daniela Amodei, who left OpenAI due to disagreements with the company’s direction. This young company based in San Francisco (USA) has developed an intelligent ‘chatbot’ named Claude. The chatbot, which aims to rival OpenAI’s popular ChatGPT, was unveiled last March. On Wednesday, the company raised $450 million in a round led by Spark Capital. Anthropic is one of the ‘start ups’ that is receiving the most attention. By the end of 2022, Google invested more than US$300 million to gain 10% of the shareholding. The company has an agreement with the American giant, which is its cloud computing provider. Last March, ‘The Information’ revealed that the company was negotiating with Spark the injection of new funds in an operation that values the ‘start up’ at more than US$4,000 million.
Hugging Face attracts VC giant Sequoia
This New York artificial intelligence company has recently closed a US$100 million Series C round in which it has been valued at US$2 billion. Investors such as Sequoia and Coatue have entered the round, led by Lux Capital. Hugging Face has created a platform that works as a kind of open source library for machine learning projects, so that companies and developers can use, for example, pre-trained natural language processing models. More than 10,000 companies use Hugging Face to build technology based on ‘machine learning’.
Runway triples its valuation in half a year
Runway is a generative artificial intelligence start-up known for being one of the companies behind the Stable Diffusion imager. According to Business Insider, the company has closed a financing round of US$100 million in which it has been valued at US$1.5 billion. The valuation triples that achieved at the end of last year, when it was raised for US$50 million in a financing round led by Felicis. Stability AI, the other company behind Stable Diffusion, is also a unicorn. The young company raised US$100 million at the end of the year with a ‘post money’ valuation of US$1,000 million.
