The AI boom is here

The rest of the tech world might be slumping, but in one sector the investor cash is flowing freely and startups are still fetching eye-popping valuations: The “generative artificial intelligence” space is booming like it’s 2021.

  • Generative AI is a catch-all term for AI tools that use sophisticated models to create new images, text, and other content rather than just analyzing something that already exists. 

Driving the news: Two major generative AI startups commanded unicorn-status valuations in recent fundraising rounds (something that wouldn’t be out of the ordinary two years ago, but has become much rarer lately).

  • Jasper, an AI tool that writes marketing copy, raised $125 million at a $1.5 billion valuation.
  • Stability AI, whose technology is used to power open-source AI tools like the image-generating Stable Diffusion product, raised $101 million at a $1 billion valuation.

Why it matters: The gold rush in the space is a bet by investors that generative AI technology is good enough to start being used in the real world for commercial purposes, a development that could be massively disruptive.

  • For example, we used the DALL-E 2 system to create the image for this story in under 10 seconds by asking it to produce “a baroque painting of a robot painting a landscape on a canvas.”
  • The use cases for generative AI are just starting to be discovered—millions of people are already creating images using tools like DALL-E 2, but companies are already exploring ways to use it for everything from fashion design to architecture.

Yes, but: The rapid adoption of generative AI (that makes it a hot investment) is also creating new problems. 

  • While some AI systems restrict what content they can be used to make, one of the largest, Stability AI, does not have any limitations—it’s now being used to proliferate violent images and nonconsensual pornography.
  • Artists have also complained that AI image generators are ripping off their distinct styles, undermining the value of their work.

Bottom line: Generative AI is in its early days, but with money flowing into the space expect it to soon become a larger part of your life.