Now that artificial intelligence (AI) can pass MBA exams and create workout plans, investors just can’t pull out their chequebooks fast enough.
Driving the news: It isn’t just OpenAI, the company behind ChatGPT, capitalizing on the hype. In the wake of a $10 billion investment from Microsoft into OpenAI, conversational AI startups Anthropic and Character.ai are reportedly looking to raise hundreds of millions.
Catch up: Last year, USD $1.37 billion poured into generative AI companies—–nearly as much investment as the space saw over the entire previous half-decade. In Canada, AI-focused venture capital firm Radical Ventures launched a $550 million AI fund just last week.
- Venture capital is moving on from previously hyped-up areas like B2B SaaS, EVs, and Web3. In the current crypto winter, AI is where VCs are going ice fishing.
- Anthropic is closing in on a $300 million funding round, while Character.ai, which makes chatbots based on famous figures, is said to want to raise $250 million.
Why it matters: Investment capital is supercharging the development of AI technologies spanning healthcare, robotics, and more, all of which they’re betting will change the world. Unfortunately, it’s hard to predict how they’ll change the world, and whether we’ll like it.
- “People need something to tell their investors or themselves, honestly, that there is a next thing to be excited about,” said one VC investor.
Yes, but: The technology’s rapid advancement raises alarm bells. There are some concerns around how generative AI could disrupt the job market, produce deepfakes and disinformation, and infringe on privacy rights. In a recent op-ed, a California congressman said he is “freaked out by AI, specifically AI that is left unchecked and unregulated.”