AI start-ups continue to raise huge sums

Vaseline3 weeks ago

0 3 minutes read

AI start-ups continue to raise huge sums

To help you understand how AI and other new technologies are affecting energy consumption, trends in this space and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you updated with the latest developments and forecasts . (Get a free edition of the Kiplinger Letter or subscribe). You’ll get all the latest news by subscribing first, but we’ll publish many (but not all) of the forecasts a few days later online. Here is the latest…

It’s getting hard to keep track of the staggering sums being invested in AI start-ups.

For example, three-month-old Safe Superintelligence (SSI) recently raised $1 billion to develop safe AI, valuing the company, founded by a former scientist at Microsoft-backed OpenAI, at $5 billion. Poolside, a start-up that builds AI to write software, is in talks to raise nearly $500 million at an estimated $3 billion valuation. And Glean recently raised $260 million to help build an AI platform for workers.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, more informed investor.

Save up to 74%

Sign up for Kiplinger’s free e-newsletters

Profit and prosper with the best expert advice on investments, taxes, retirement, personal finance and more – straight to your email address.

Profit and prosper with the best expert advice – straight to your email address.

Don’t expect the trend to slow down anytime soon, despite growing AI skepticism. Much of the funding will go toward buying Nvidia ( NVDA ) chips or computing power from the cloud companies that installed them.

What are investors thinking? Some seem to trade ROI for AGI. Instead of focusing on return on investment, venture capitalists and other start-up investors are thinking about artificial general intelligence, the emergence of a super AI that cracks the code of human intelligence and then improves upon it.

The term is often seen in technology circles, although the definition is not clear. Open AI’s founding goal is to build AGI, which it defines as “a highly autonomous system that outperforms humans at the most economically valuable thing.” Other AI companies and tech firms have similar designs and definitions. The possibilities of an AGI system are seemingly endless and highly disruptive, at least in theory. Don’t overlook how many tech executives, workers and investors are true believers in this ill-defined tipping point and the possibility that it will happen as soon as one to three years from now.

“We may have superintelligence in a few thousand days (!); it may take longer, but I’m confident we’ll get there,” Open AI CEO Sam Altman wrote in a post this week. The remark highlights the tension between trust and uncertainty surrounding the holy grail of AI.

A breakthrough that would turn the global economy upside down is hard to imagine, despite improvements in AI technology that are now happening rapidly. Take such discussions with a healthy dose of skepticism, as many of the benefits of generative AI are likely to accrue over a longer period and many challenges remain. Venture capitalists can still cash out without a breakthrough if a start-up they’ve funded is bought by a larger company.

There is another reason for the momentum of doing business: a winning mentality. Many people in the industry believe that one company will dominate every field of artificial intelligence, and to get to that dominant position requires fast action and a lot of money.

One person trying to push back against a winner-take-all world is Meta ( META ) CEO Mark Zuckerberg, who is giving away powerful AI technology for free in his push for “open source” AI software that prevents companies from being forced to rely on a dominant player. Zuckerberg’s plan stems from the restrictions he believes Meta’s collection of social media apps must adhere to on mobile devices. He is particularly upset about the rules implemented by Apple’s (AAPL) dominant mobile ecosystem, which Meta must follow in order to reach Apple’s global iPhone customer base.

So far, the plan is working. Meta’s AI models are being rapidly adopted by start-ups and major companies, including AT&T, DoorDash, Goldman Sachs, Niantic, Shopify, Spotify and Zoom.

Meta benefits from improvements to its AI models, which can be used to help generate more attention-grabbing posts on Facebook and Instagram, plus refine Meta’s core technology for its apps and advertising system. The strategy, which costs tens of billions of dollars to buy Nvidia products and install them in Meta’s data centers, also poses a serious challenge to Meta’s closest competitors, which build their own AI systems.

This forecast is from The Kiplinger Letter team, which has been running since 1923. It’s a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s next . maximum of your investments and money. Subscribe to the Kiplinger Letter.

Vaseline3 weeks ago

0 3 minutes read

Vaseline

Related Articles

The Dow Jones Industrial Average fell again cautiously on Monday

DRH Investments Inc. sell 10,312 shares of Alphabet Inc. (NASDAQ:GOOG)

Angeles Wealth Management LLC increased its position in shares of Caterpillar Inc. (NYSE:CAT)

Howden Re continues to develop the treaty with Guy Carp’s Jarvis and Hatton