In 2011, IBM’s Watson supercomputer made history by crushing two masters of trivia in a game of “Jeopardy!”. Touting its AI abilities, the company decided to make a substantial investment toward applying its power to solve healthcare. Now, after billions invested and a series of high-profile setbacks, the company is effectively selling Watson and sun-setting its platform as of Dec 2023 without any direct replacement.
Can Generative AI succeed in applications or go the Watson way? Can it revolutionize care and change our lives as we know them? Let the debate begin!
It sure has entertainment and content-spinning value. But more business specificity, transformational value, and ROI need to be explored.
Although this so-called generative AI often creates nonsensical pictures and produces generic text, many investors are convinced the new technology has the potential to transform.
As per said Gaurav Gupta, a partner at Light speed, Text, and text-to-image AI can transform lots of different workflows and customize them for a particular use case—could be advertising, could be gaming, could be entertainment, could be pretty much everything. It may happen but incrementally over time. The hefty valuation of text-to-image generator Stability.ai of 1Billion in Oct 2022 seems to reflect the hype.
Recent advancements in language model technologies have increased investor interest, with 78 deals worth more than $1 billion made in 2022 alone. Companies like Runway, Regie, Jasper, and Descript have seen high valuations, resulting from investors’ confidence in their ability to attract customers quickly when released.
However, some investors are cautious of the ease of generative technologies’ replication model, which leads to a lack of differentiation and defensibility among companies in this space. Additionally, due to the recent success of ChatGPT – which gained one million users within five days after its launch last November – some VCs may be over-investing based on short-term hype rather than long-term viability.
Generative AI has been around for years, but in the past 18 months, language models have become increasingly powerful.
OpenAI and Stability AI made their foundation models available to developers at an affordable price or open-source environment. Lightning speed to getting market ready caused a surge of seed deals, with investors betting over $1 billion on 78 deals in 2022 alone – almost as much as was invested in the previous five years combined.
Companies like Runway, Regie, Jasper, and Descript raised high valuations due to investor confidence that they would attract customers quickly when ready for market release.
Conclusion :
Adopting language model technologies has created a surge of investor interest and high valuations for companies in this space. However, investors must exercise caution when considering investment opportunities due to the potential for bubble or bust cycles and lack of differentiation among competitors. Entrepreneurs need to be more thorough with business market fit benefit cases in generative AI. Through careful analysis and consideration of existing research on investment trends, predictive analytics models, and potential risks associated with these technologies, investors can better identify suitable investments while minimizing risk. By doing so, they can ensure longer-term success.
Author: Anju Chaudhary
English