Investors are having second thoughts about the generative AI boom, citing concerns about the real applicability of the budding technology and the difficulty competing with huge tech companies such as Amazon, which are investing heavily.
Pitchbook says investments in generative AI startups are down, both by number and by deal size. The firm counts 142 investments in April, May, and June, and only 101 investments in July, August, and September. The cumulative deal value in the Q3 was $6.1 billion, but $4 billion of that was Amazon’s investment in Anthropic. Deal value in Q3 was $4.36 billion, Pitchbook says.
“Momentum is definitely waning as the market comes back to Earth,” Index Ventures partner Bryan Offutt told Pitchbook. Generative AI, and ChatGPT-style chatbots in particular, are still too prone to inaccuracies to be considered reliable enough for commercial application.
The whole tech space is in a venture-capital slump, a trend boosted by rising interest rates. And generative AI investments continue to outperform those in the wider tech space, Pitchbook points out.
The Israeli AI company AI21 raised $155 million in August. The medical AI assistant company Corti raised $60 million in September. In mid-September, the data analytics and AI platform Databricks raised more than $500 million from investors including Nvidia and T. Rowe Price.
But the trend is what matters. Investors are becoming more circumspect about the actual business potential of generative AI research projects.
Login to add comment
Other posts in this group
Now that the “100 men vs. one gorilla” debate has been settled, a new question is circulati
The rideshare market has reached a crossroads. Autonomous vehicles are on the rise, driver unrest is mounting, and customers are questioning everything from pricing to trust and safety. In the mid
A group backed by tech billionaires spent years and $800 million secretly buying up over 60,
Move aside, Google Maps: Snapchat’s Snap Map has hit a major milestone with 400 million monthly active users.
Launched in 2017, Snap Map began as a GPS-based feature that allowed users t
In April 2024, Yahoo acquired Artifact, a tool that uses AI to recommend news to readers. Yahoo folded Artifact’s—which was cofounded by Instagram cofounders Mike Krieger and Kevin Systrom—into it
It is hard to believe that in 2025, we are still dialing to schedule doctor appointments, get referrals, refill prescriptions, confirm office hours and addresses, and handle many other healthcare
Email: It’s one of the more evil of the necessary evils. We all spend a significant chunk of our days wading through messages, to the point that it can feel like a never-ending task. Save us, arti
