The extent of the AI hype has prompted a wait-and-see approach in the rest of the industry.
Multibillion-dollar investments in artificial intelligence startups have become almost commonplace in Silicon Valley — with dollars raised for AI companies outpacing funding totals in every other category of tech, and reaching $17.9 billion in the third quarter.
Some VCs have compared the AI boom to the advent of the consumer internet. “This is the web moment, the HTML moment, for generative AI,” said Praveen Akkiraju of Insight Partners. Just as the internet had existed for years before user-friendly interfaces brought it into widespread use, AI is surging because easy-to-use programs like OpenAI’s ChatGPT are gaining traction, he said.
Even AI is not wholly immune to startup pressures. Total fundraising for the industry is still less than it was two years ago, during the height of the pandemic tech boom. And its success has been driven largely by big deals for a few standout companies, including Anthropic and OpenAI. One startup that benefitted from the buzz in 2021 was Kong , a business that helps manage the ways software applications talk with each other. It raised $100 million at at a valuation of $1.4 billion in a deal led by Tiger Global Management, with others like Goldman Sachs Group , Index Ventures and CRV participating.
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