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Hey, Insiders! Welcome to the latest AI newsletter. Here are the top headlines for today: - OpenAI is reportedly nearing $1B in annual revenue.
- Over 25% of U.S. startup funding went to AI companies this year.
- Chinese tech giant Baidu gained approval to launch its chatbot to the public.
If you enjoy this newsletter, please consider sharing it with friends or colleagues. Much appreciated! Beth
p/beth-duckett | |
| 1 | | OpenAI is poised to generate more than $1B in revenue over the next 12 months, significantly outpacing the $28M brought in over the last year, according to The Information. Previously, the ChatGPT developer anticipated $200M in revenue for this year. The new billion-dollar figure indicates that OpenAI's monthly revenue now stands at more than $80M, per the report. More: - OpenAI's revenue last year was $28M before it began charging for ChatGPT subscriptions.
- In 2022, the company incurred a $540M loss from the development of ChatGPT and GPT-4.
- Since ChatGPT's debut on Nov. 30, the tool has been adopted by more than 80% of Fortune 500 companies, according to the company.
- In addition to ChatGPT subscriptions, OpenAI generates revenue by offering API access to its AI models for developers and businesses.
- This week, the Microsoft-backed company also introduced ChatGPT Enterprise, an advanced version targeting business customers.
Zoom out: - OpenAI's deal with Microsoft, announced this year, entitles Microsoft to 75% of OpenAI's profits until the former recoups its $13B investment, as noted by Fast Company.
Question: What lessons do you think other AI startups or tech companies can draw from OpenAI's success story? Join the conversation here. |     | |
| 2 | | Over a quarter of total investment in U.S.-based startups this year has gone toward AI-related companies, more than double the percentage of last year, Crunchbase data reveals. Between 2018 and 2022, AI startups received an average of 12% of overall funding. 
What the numbers show: So far in 2023, funding for AI-related startups has surpassed $23B, whereas non-AI funding has reached over $67B. This marks a significant change compared to 2021, when AI-related funding amounted to $42.76B versus $293.4B for non-AI funding. Why it matters: Despite a 50% YoY decline in North American VC funding in H1 2023, the AI sector has bucked the trend. Its ability to influence a wide variety of areas like real estate, fintech, biotech, web3, and HR has led to a greater share of funding. AI investments have demonstrated growth and advancement, suggesting that startups that are integrating AI into their businesses stand a better chance of securing funding. | | | |
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| 3 | | Chinese tech giant Baidu is the first to gain Beijing's approval to launch a generative AI product to the public. Baidu has been integrating its Ernie Bot, similar to OpenAI's ChatGPT, into its search engine. It's also planning to launch new applications powered by AI. More: - In July, the Cyberspace Administration of China (CAC) announced that generative AI providers planning to offer their services to the public would need to undergo security assessments.
- While Baidu launched Ernie Bot in mid-March, the service has been largely restricted from the general public in China.
- Now, Baidu has been given the OK by the CAC to make the Ernie bot generally available to the public via its website and app stores.
Zoom out: - Ernie Bot's initial launch in March drew mixed responses, with some finding its performance lackluster compared to ChatGPT.
- Since then, other Chinese LLM rivals have been announced, including Alibaba's Tongyi Qianwen and ByteDance's Doubao.
- Baidu's approval from the CAC could mark a turning point, allowing companies to offer their ChatGPT-style services across the country.
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| 4 | | AI21 Labs, the developer of the Jurassic large language models, announced it has closed a Series C funding round of $155M, valuing the company at $1.4B. The Tel Aviv-based company, founded six years ago, offers advanced text-based generative AI services catering to Fortune 100 firms and consumers. More: - Investors included Walden Catalyst, Pitango, b2venture, SCB10X, Samsung Next, and AI21 co-founder Amnon Shashua, with participation from Google and Nvidia.
- With an annual revenue of $50-60M, AI21 plans to expand its workforce by 100 employees in the upcoming year.
- The company's proprietary Jurassic-2 foundation models power AI21 Studio, a developer platform for building text-based business apps, and Wordtune, a multilingual AI assistant for reading and writing.
- AI21 has recently collaborated with customers including Carrefour, Clarivate, eBay, Guesty, Monday.com, and Ubisoft.
About the founders: - Shashua is also president and CEO of Mobileye, a self-driving technology company owned by Intel.
- The other founders of AI21 Labs are Yoav Shoham, a professor emeritus at Stanford who successfully sold two companies to Google, and Ori Goshen, a serial entrepreneur who has co-founded other Israel-based tech companies.
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| 5 | | Walmart is rolling out a generative AI workplace tool to 50,000 non-store employees. The company said its My Assistant feature, part of its " Me@Campus" app for workers, can generate new content, draft questions, summarize documents, and more. More: - The feature reportedly combines Walmart corporate data with unidentified third-party LLMS.
- According to a company blog post, the aim is to free up office employees from repetitive and monotonous tasks so they can focus more on improving the customer experience.
- Executives noted that generative AI can help employees work more quickly and efficiently.
- However, they still acknowledged that it "lacks judgment, has a limited understanding of context, and is only as good as the data it's trained on."
Zoom out: - Meanwhile, Walmart has added conversational AI tech to shopping features, such as its "Voice Order" service.
- It also offers an "Ask Sam" voice assistant for in-store employees to locate items.
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| 6 | | 🍋 MORE FRESH FUNDING 🍋 - New York-based AI startup Hugging Face secured $235M in funding at a $4.5B valuation, with major contributions from tech giants including Google, Amazon, Nvidia, and Salesforce. The funds will mainly be used to attract top talent and further build the platform and open-source AI, according to Hugging Face CEO Clement Delangue.
- AI semiconductor startup Sapeon nabbed $45M (60B won) in Series A funding at a valuation of $378M (500B won). Ascent Equity Partners led the funding round, with additional backing from GS Group affiliates, Daebo Communication & Systems Co., Hana Financial Group, Mirae Asset Venture Investment, We Ventures, E1, and others.
- Eldercare robotics maker Intuition Robotics nabbed $25M in fresh funding led by Toyota Woven Capital with participation from Toyota Ventures, OurCrowd, Western Technology Investment, and others.
For the latest on AI startup funding and more in the VC community, subscribe to our Inside Venture Capital newsletter. | | | |
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- The U.S. reportedly extended export restrictions on Nvidia's advanced AI chips, originally imposed on China, to other regions, including parts of the Middle East. Nvidia said the limits on its A100 and H100 chips would not immediately impact results.
- G42, MBZUAI, and Cerebras developed and released Jais, an open-source Arabic-language AI model named after the UAE's highest mountain.
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INSIDE AI LEADERBOARD (30 DAYS) |
 | AI and technology writer | | Beth is the curator and writer of the AI and Tech newsletters at Inside. With a career in journalism and editing that began in 2007, she has written for publications including USA Today, The Arizona Republic, Arizona Business Gazette, and more. You can reach her at Beth.Duckett@yahoo.com. | | This newsletter was edited by Aaron Crutchfield | |
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