Shulou(Shulou.com)11/24 Report--

According to news in the morning of December 12, Beijing time, with the increasing discussion and hype around "generative AI" (generative AI), venture capitalists are busy investing in these artificial intelligence start-ups to fill the gaps left by failed cryptocurrency and blockchain companies.

Recently, complex computer programs that can write scripts and create art in just a few seconds have developed by leaps and bounds, and such artificial intelligence tools have attracted a large number of investors. investment in these projects has also soared, creating a rare bright spot in an entrepreneurial environment dominated by plummeting valuations and layoffs in recent years.

Microsoft is the biggest sponsor of OpenAI, a San Francisco-based company that released the latest version of its GPT-3.5 software to the public last week. It can talk to users via text, answer follow-up questions, and even admit mistakes and reject inappropriate requests.

In just five days, ChatGPT had more than 1 million users and was praised by billionaire Elon Musk, the co-founder of OpenAI, who left the board in 2018. "ChatGPT is terrible," Musk said on Twitter. "We are not far from dangerous and powerful artificial intelligence."

The development of similar powerful artificial intelligence has become a new entrepreneurial idea for countless investors and entrepreneurs. Eddard Stasi, managing partner of IQ Capital, said: "any organization can pick up these things and start training them to evolve with them and see what they can produce. There is no point in standing by and watching."

With Silicon Valley investors' social media accounts flooded with images and text generated by artificial intelligence, interest in so-called "Web3", a vision of a decentralized virtual world based on blockchain, waned during the recent cryptocurrency collapse, and more interest turned to artificial intelligence.

"there's a huge hype cycle," said Colin Treseler, co-founder of Supernormal. "the hype about Web3 is over and these people need a new place to go." Supernormal uses artificial intelligence to summarize online meetings.

Venture capital investment in creative artificial intelligence has increased by 425 per cent since 2020 and reached $2.1 billion this year, according to data released by PitchBook, against the backdrop of a decline in total investment in the broader technology market.

One artificial intelligence entrepreneur said that after discussing potential financing problems with only three investors, he was overwhelmed by the investment proposals of more than 20 other investors and secured the investment after a week of whirlwind meetings around the world.

Two deals in mid-October marked the beginning of the latest funding frenzy, with both Coatue Management and Lightspeed Venture Partners completing their investments.

Jasper, which calls itself an "artificial intelligence copywriter", raised $125 million at a valuation of $1.5 billion, while London-based Stability AI, one of the companies behind the image generation tool Stable Diffusion, raised $101 million, making it a "unicorn" start-up with a valuation of $1 billion. This week, Runway, another artificial intelligence developer, raised $5 million.

When Cristobal Valenzuela co-founded Runway four years ago, investors told Cristobal Valenzuela that "creative artificial intelligence is not a good project". "at that time, everyone thought we were a little crazy," he said. " Now, he added, investors say the technology may be "as transformative as mobile communications 20 years ago".

"one of the recent changes is that the quality of the model has become very good," says Mr Valenzuela. Creative artificial intelligence is no longer the idea of the future, it has really appeared in front of us. "

Whether ChatGPT and OpenAI's art program DALL-E, or competitors' graphics tools Stable Diffusion and Midjourney, are examples of the use of large languages and image models, sometimes referred to as creative artificial intelligence or basic models, which can generate content based on previous word sequences or images.

In September, Sequoia Capital partners co-wrote an investment paper using GPT-3 software, saying that artificial intelligence would be able to produce better final drafts than the human average in the next two years, generate code on a commercial scale, and draft images and games.

Sequoia Capital concluded in his analysis: "Creative artificial intelligence is smoothly becoming not only faster and cheaper, but also in some cases better than what human beings have created." The agency completed a round C investment in Hugging Face in May, which owns its own large language model start-up Bloom, which is valued at $2 billion.

According to research by PitchBook, the global market for AI-enhanced content solutions will reach $2.3 billion this year and is expected to grow by 17% by 2025. But the group added that "the technology may not generate high revenue in the short term because professionals resist artificial intelligence solutions and the technology is still immature".

Large language models have previously been the preserve of tech giants such as Microsoft, Google and Facebook because of the high cost of running programs and storing large amounts of data used to learn artificial intelligence programs.

Today, however, OpenAI has provided its technology through the application program interface, allowing any company to access its functions. Founded in 2015, OpenAI was originally a non-profit organization based on the principle of giving everyone access to artificial intelligence and safely developing technologies, the brainchild of some of the most radical thinkers in the tech world, including Musk and Peter Thiel.

OpenAI became a for-profit enterprise in 2019, and soon after, it won a $1 billion deal from Microsoft, including experimenting with its Azure cloud computing platform. Under the deal, Microsoft received first-hand information about commercializing the early results of OpenAI research.

Microsoft's focus on OpenAI comes after rival Google invested heavily in search and voice technology and bought London-based artificial intelligence company DeepMind for £400m in 2014. Microsoft's deal with OpenAI has pushed it to regain some of its edge in artificial intelligence.

"one of the important historical advantages of large companies is that they have access to large, typically proprietary datasets," says IQ Capital Stasi. "they have been able to use these datasets to train larger and larger models."

On average, the cost of running ChatGPT is estimated at a few cents per chat, says Sam Altman, chief executive of OpenAI. Asked on Twitter if the tool would be free forever, he replied: "We will have to monetize it in some way at some point, and the computational cost of such tools is very high and eye-popping."

ChatGPT has proved so popular in recent days that the platform limits the number of people who can use it. The company is raising more money from investors, the report said. Last week, Altman said on Twitter that the company was looking to hire more employees.

UK-based deep technology venture capital firm Bloc Ventures has focused its investment on technologies that can achieve a high level of cloud computing to reduce the cost and energy consumption of creative artificial intelligence.

"We are in a world where companies are chasing zero carbon emissions, and having chatbots that can talk through artificial intelligence is a luxury," said David Leftley, a senior Bloc Ventures executive. "they are burning a hole in the earth in the data centre."

New York-based Runway is taking a more ambitious and costly approach, doing major artificial intelligence research to build models and turning it into a set of image generation and collaboration tools that have been used by companies including Publicis, Google and CBS.

"there are a lot of companies that develop based on existing APIs, but our long-term goal is that you need to have your own stack and you need to have your own technology," says Mr Valenzuela. "so you can change more quickly and easily when you need it."

He insists that artificial intelligence start-ups like Runway can avoid the edge of big technology companies. "the field is developing very fast," he said. "the speed of learning is really important. what matters is how you adapt and how you change."

By providing ChatGPT,OpenAI to the public, it can collect more data to train its large language model and eliminate errors.

This technology and similar artificial intelligence tools also have an important limitation, that is, the so-called "hallucination", in which the program gives a convincing answer, but the answer is not consistent with the facts. Recently, for example, on Twitter, ChatGPT mistakenly claimed that Angela Merkel and Gerhard Schroeder were from the same political party.

"it has a huge potential to spread misinformation, and if you let it create a conspiracy theory about COVID-19 's epidemic, it will produce a very persuasive copywriter," said Carissa V é Liz, an associate professor at the Institute of Ethics and artificial Intelligence at Oxford University.

OpenAI himself admits that GPT "sometimes writes answers that sound reasonable but incorrect or meaningless". The company also acknowledges other limitations of the technology, leading many to believe that the technology requires human intervention before it can be embedded in the enterprise.

"there are still a lot of questions about the commercial viability of these models and capabilities," said Lisa Weaver-Lisa Weaver-Lambert, head of private equity, data and artificial intelligence at Microsoft. She believes that creative artificial intelligence is still in the experimental stage.

She added: "if I want to invest in this area, I will first think about the specific business problems that people have been solving. Can artificial intelligence come up with a faster, lower-cost way to do the same thing?"

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