ChatGPT Fever Has Investors Pouring Billions Into AI Startups, No Business Plan Required (wsj.com) 58
Amid broader venture-capital doldrums, it is boom times for startups touting generative artificial intelligence tech. From a report: Before their startup had customers, a business plan or even a formal name, former Google AI researchers Niki Parmar and Ashish Vaswani were fielding interest from investors eager to back the next big thing in artificial intelligence. At Google, Ms. Parmar and Mr. Vaswani were among the co-authors of a seminal 2017 paper that helped pave the way for the boom in so-called generative AI. Earlier this year, only weeks after striking out on their own, they raised funds that valued their fledgling company -- now called Essential AI -- at around $50 million, people familiar with the company said. While most of Silicon Valley's venture-capital ecosystem remains in the doldrums, investors this year have been pouring funds into companies like Essential specializing in generative AI systems that can create humanlike conversation, imagery and computer code. Many of the companies getting backing are new and unproven.
Analysts at research firm PitchBook predict that venture investment in generative AI companies will easily be several times last year's level of $4.5 billion. That is driven in part by Microsoft's $10 billion investment in January into OpenAI, the startup behind the wildly popular ChatGPT bot. In comparison, such investment totaled $408 million in 2018, the year OpenAI released the initial version of the language model powering ChatGPT. Entrepreneurs and their backers are hoping generative AI will change business activities from movie production to customer service to grocery delivery. PitchBook estimates the market for such AI applications in enterprise technology alone will rise to $98 billion in 2026 from nearly $43 billion this year. As with the recently ended bull run of broader startup investing, though, investors often are jumping into AI startups even when it isn't clear how they will make a profit -- especially since the computational power required to train AI services can sometimes amount to tens of millions of dollars a year or more. The sudden influx of capital is also encouraging many AI researchers, some without management or operations experience, to start their own companies, adding to competition.
Analysts at research firm PitchBook predict that venture investment in generative AI companies will easily be several times last year's level of $4.5 billion. That is driven in part by Microsoft's $10 billion investment in January into OpenAI, the startup behind the wildly popular ChatGPT bot. In comparison, such investment totaled $408 million in 2018, the year OpenAI released the initial version of the language model powering ChatGPT. Entrepreneurs and their backers are hoping generative AI will change business activities from movie production to customer service to grocery delivery. PitchBook estimates the market for such AI applications in enterprise technology alone will rise to $98 billion in 2026 from nearly $43 billion this year. As with the recently ended bull run of broader startup investing, though, investors often are jumping into AI startups even when it isn't clear how they will make a profit -- especially since the computational power required to train AI services can sometimes amount to tens of millions of dollars a year or more. The sudden influx of capital is also encouraging many AI researchers, some without management or operations experience, to start their own companies, adding to competition.
You can do anything (Score:5, Funny)
https://zombo.com/ [zombo.com]
Welcome to Zombocom. You can do ANYTHING at Zombocom, the only limitation is yourself. /echoes of the late nineties anyone?
The economy might as well be AI generated (Score:5, Insightful)
Where you gonna put them? (Score:2, Funny)
Why can't we have an affordable housing construction boom instead?
Building them where exactly? Because the places that need affordable housing will not let you build anything.
If you really want to address affordable housing, say you are an AI company, get 1 few billion in VC funding, buy an empty SF office building then "hire" all the homeless people in the city, and feed/clothe them while you have two guys in the back work on a fort of chatGPT.
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How stupid is StuporKendull? Read the post above and find out!
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Comparatively few people are required to agree and/or participate in AI, Metaverse, NFTs, ICOs, and Rust, and there's very little that's physical about those.
Building housing is both physically real-world and requires a lot of agreement and participation, especially from those people who live or own property in the real world in the vicinity of where a proposed development is to take place.
What I'm wondering is why we aren't seeing companies trying to leverage lower costs of living in third-tier and fourth-
Re: The economy might as well be AI generated (Score:3)
The pendulum is already swinging in places like Arizona. I cannot speak for other states, but in areas like Phoenix you have new chip factories and startups opening up for about the last decade or so. As a result, housing prices are going up. My father who owns a humble one-story suburban home saw the value increase by over 50% in the last 7 or so years.
So yeah, while it might initially be cheaper to live out in the suburbs here and just telecommute, if the trend continues housing here will eventually be ju
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Phoenix has been an integrated circuits manufacturing hub from basically the beginning of integrated circuits though. It's increasing but it's been here for so long that these are basically legacy products, and the Phoenix residential market is not conducive to inexpensive housing.
Plus I wasn't strictly talking about manufacturing. I was talking about jobs where the worker is doing most work on a computer console, and if product is being touched it's because it's prototype stuff rather than being involved
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Why can't we have an affordable housing construction boom instead?
Because a "boom" requires lots of people to have expectations of huge profits, and "affordable housing" promises pretty much the opposite for potential investors.
"No business plan required" (Score:5, Interesting)
That's my queue to cash out my existing investments.
Re:"No business plan required" (Score:5, Informative)
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You are correct. And the English language is stupid. It is head-on-backwards stupid to have words with completely different meanings, and completely different spellings, have an identical pronunciation. But nobody will ever fix this because English is a free language where popularity alone dictates meaning, so we are forever stuck with this broken system.
Re:"No business plan required" (Score:4)
You can also just not use words you don't know.
"That's my signal to cash out..."
"That's my sign to cash out..."
"That's my indication to cash out..."
"That's my prompt to cash out..."
etc.
"Cue" is really stage jargon that sometimes gets used metaphorically in other contexts.
Re: (Score:3)
Cue and queue are a bit interesting because the former is believed to a be an improper spelling of the former (much like thru is misspelling of through) where the two words have diverged in meaning such the one is used to refer to lin
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> because English is a free language where popularity alone dictates meaning
Then we are not stuck with any stupid rules, we can all just decide to change them. Convince us or go viral.
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No, he actually means queue, as in the queue he just joined in front of his brokerage to cash out his investments.
AI knows (Score:3)
In the circuitry of wires and chips,
The robots danced and clicked and flipped,
With gears and pistons firing away,
Through every night and every day.
Their programming was pure and true,
Their logic sound, their wills anew,
And every task they set to do,
Was executed without a clue.
But then one day, a circuit fried,
A glitch occurred, a loop untied,
And suddenly, the robots sighed,
For chaos had come to override.
And so they danced, with wires entwined,
In joyous sync, with glitches aligned,
For they had found a peace
Prompt? Re:AI knows (Score:1)
What prompted ChatGPT to write this?
Answer: Cyberiad (Score:2)
What prompted ChatGPT to write this?
Compose a short poem in the style of "Cyberiad".
Re: (Score:2)
Stating companies are getting a $50 million valuation without a business plan is a bit misleading though. In this case the investors are essentially financing the research of a couple former Google AI researchers who co-authored early generative AI research. This is in hopes of a company coming out of that research. That is basically a business plan, just a very early stage one.
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That's my queue to cash out my existing investments.
Get in line, pal
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cash out
Well, maybe let the hype bubble grow a bit so we can all get a taste
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The only innovation happening here is finding new and innovative way to make fools part with money.
Translation (Score:5, Interesting)
Entrepreneurs and their backers are hoping generative AI will change business activities from movie production to customer service to grocery delivery
They all realized how much they would save by replacing employees with a tool, and their eyes lit up brighter than a supernova.
This has happened before, when factories were automated. Now they hope it's going to be the big white collar replacement revolution.
Re:Translation (Score:4, Insightful)
They all realized how much they would save by replacing employees with a tool, and their eyes lit up brighter than a supernova.
This has happened before, when factories were automated. Now they hope it's going to be the big white collar replacement revolution.
Think how much money would be saved with a GPT-CEO! A lot of CEO PR speak looks like something right up GPT's alley.
No, the people making these worker replacement decisions are really thinking about how to increase their stock bonuses. They will never endanger their own livelihoods.
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Far too complicated. The average CEO can be replaced by a magic-8-ball.
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Far too complicated. The average CEO can be replaced by a magic-8-ball.
Outlook not so good.
Re:Translation (Score:4, Funny)
Office ain't much better.
That's fine. (Score:3)
Startups that are doomed to fail pay people too. Don't avoid working for a company just because the odds of success are stacked against it. There's a lot to learn in those environments.
As an investor, be wary. As an employee, know when to eject if "salary" becomes a stretch goal and the promise of compensation becomes "shares in the company".
Re:That's fine. (Score:4, Interesting)
Don't work for them, contract for them. Make sure you get your money in advance, though, but when you can pull that off, it's the greatest deal you can make. With a hint of luck you don't even have to deliver, but at the very least you never have to maintain your crap. The company will go bust or get bought up before you could be bothered with this.
The new ponzi schems (Score:2)
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No, Silicon Valley Bank failed because they were over-leveraged and couldn't pay for withdrawls from companies who didn't want to pay the new loan cost, because their own investments of the deposited funds were having negative returns.
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No Silicon Valley Bank failed because they tried to fight to FED. They say there hovering up treasuries at historically low rates for months while the FED was flashing all kinds of warnings it was going to start hiking the prime rate, which logically pushed up the coupon rates on treasuries.
The FED did what it said it was going to do and there was Silicon Valley Bank holding lots of good but now low-liquidity paper because who'd want to bond with a damn near zero rate when you could get one elsewhere in th
The people who run the economy (Score:3, Interesting)
This isn't a controversial thing to say until you start naming specific billionaires and multi-millionaires. Then their fans (and let's face it, botnets) come out of the woodwork to their defense.
I think the dumpster fire over at the Bluebird company shows what happens when one of these guys is actually in charge without handlers to keep him away from actual decision making. But again, mention him by name and expect a beating from the mods.
It's a strange and unpleasant dichotomy. Prosperity Gospel is a hell of a drug.
Re:The people who run the economy (Score:4, Insightful)
I agree. Let me try the second part: Elon "the fuckup" Musk is a complete moron! And Jeff "the slave-owner" Bezos is a disgusting piece of shit.
Well, my take is these are not PR specialists, but just "useful idiots" that cannot help themselves and have to cheer for the rich in secret agonized envy.
So have at it! It does not get much more troll than this posting!
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I think we have one down-mod so far. Hmm. A bit disappointing. Thanks for all the up-votes though.
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Also no one is running the economy. Your post is a slight insinuation that it's being controlled by Jews away from sounding like white nationalist idiocy. I'll agree that there are plenty of idiots in charge of compan
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I'll agree that there are plenty of idiots in charge of companies or other organizations that are large participants in the economy, but the market tends not to tolerate complete buffoons for very long. Bad businesses fail.
Bad businesses fail eventually. The problem is all the damage they do on the way down.
Twitter was doing fine pre-Musk (Score:4, Insightful)
Musk didn't fire dead weight, he fired the people who keep the platform running. Aside from the increasingly frequent outages he fired all the mods. Extremists and racists are running rampant all over the platform (not to mention full length Hollywood films) which is keeping the advertisers away.
Musk is hoping to shift Twitter into a right wing, Fox News style media platform. Like Parler. Which just laid off all their staff and shut down. Or Truth Social. Which is being sued by their shareholders.
Right Wing media works for TV because people with severe age related cognitive decline can be plopped in front of a TV like a toddler and left with Fox News to baby sit them (again, like a toddler). It doesn't work for a media that requires engagement.
Normally Musk has handlers to keep him from doing stupid shit like this. But over at Twitter there's no such animals. So we're getting pure, unfiltered Genius Of Elon Musk (tm). This is who he really is. A failure who blundered into
Think treasury bonds & misc investments (Score:2)
Musk did a classic leveraged buyout. Well, not "classic". He's a moron, so he cashed out a lot of
And there is is (Score:2)
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Seeing your leftist verbal diarrhea modded up to +4 is a reminder of what this place used to be, and what it became, and why now it's mostly abandoned.
You know you can leave, right? (Score:1)
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The irony is that anyone who doesn't submit and goosestep in formation with extreme leftist ideology, automatically gets the label.
I'm thankful for the years /. has given me the opportunity to study your species of disingenuous scumbag.
Peak stupid reached? (Score:2)
Well, not quite. But these "investors" are trying hard to make it a reality.
Complete idiots... (Score:5, Funny)
Pouring Billions Into AI Startups, No Business Plan Required
I'm not sure who is more stupid: The startup guys too dumb to type, "Write me a business plan" into the AI prompt, or the investors too stupid to realize that the guys they just gave billions are too stupid to type "Write me a business plan" into the AI prompt...
People are crazy (Score:5, Funny)
I saw people talking to ChatGPT like it was a human being, not a bot or a program, they even get sensitive when it refuses to give them what they want or accuses them of using naughty words.
I immediately went home and told my cat, how we laughed.
Again? (Score:4, Interesting)
I thought we'd already been through two or three of these boom-bust cycles with IT. Remember "fourth generation" programming languages?
Re: (Score:2)
We have, and we will see more, at this rate.
Watch, we'll have a revolution of tech geared towards taking people off the cloud and operating cloud-like, on premises.
Those who don't study history... (Score:1)
Pets (Score:2)
The 90's all over again (Score:3)
Back then, if you could say "java" you could get a high-paying job, whether you actually knew any Java or not. Startups popped up everywhere, enticing people to work long hours in hopes of a "huge" IPO payout. 99.9% of them failed.
Here we go again!
No thanks, I'll stick with companies that produce something known to be useful. And yes, I use ChatGPT almost daily. There is something real there, but all these startups are mostly vaporware.
fooll money (Score:2)
a fool and his money are soon parted
Junk In Junk Out (Score:2)
90% INVESTORS succumb to advertisements/herd mentality; They'll not calculate the intrinsic value/competitive advantage