Big Tech AI spending outpaces VC investment

New data shows that much of the artificial intelligence (AI) investment in 2023 will come from Big Tech.

Mega deal is Amazon, Google and microsoft This year, it accounted for two-thirds of that amount. 27 billion dollars The Financial Times (FT) reported on Wednesday (December 27), citing data from PitchBook, that it had focused its funding on AI startups.

While generative AI is on the rise in the wake of OpenAI ChatGPT, launched last year, has attracted venture capital (VC) firms, but these companies have been forced to cut spending amid rising interest rates and declining portfolio valuations, the FT notes. .

“Over the past year, we have seen the market rapidly consolidate around a few foundational models, with big technology companies stepping in and pouring billions of dollars into companies like OpenAI. close contact, human and Mistral,” Said Nina AchajanVenture company partner index venturessee some of the hottest startups in the world of AI.

“For traditional VCs, you had to get in early and have the belief. That meant being up to speed on the latest AI research and knowing what teams were spinning out from Google DeepMind, Meta, etc. ,” Achadjian added.

According to the report, deals like Microsoft’s $10 billion investment OpenAI, Google, Amazon Investing in Anthropic Total spending on AI companies nearly tripled the $11 billion recorded in 2021.

At the same time, this year, Decrease in VC spending in the technology field.

Meanwhile, PYMNTS wrote earlier this week that the rise of AI companies like OpenAI was also a win for the United States. infrastructure provider These include cloud platform providers Amazon, Google, and Microsoft, as well as GPU companies such as NVIDIA and Arm.

“Training generative AI requires time to own or rent hardware, requires large amounts of data storage, and requires intensive energy consumption, which is a structural cost and “The unit economics of the computing and technology boom have diverged significantly,” the report said.

According to some estimates, the cost of a single query using OpenAI’s ChatGPT platform is 1,000 times the cost of asking the same question in a regular Google search, and the benefits for AI applications are higher than those of other SaaS (Software-as-a-Service). as-a-Service) solution. .

“The high cost is calculation ability “AI models require significant investments by companies looking to compete in this space,” PYMNTS writes. “Establishing and maintaining generative AI models requires significant capital investment, industry-leading technical expertise, and most of all, a focused requires all the expensive computing infrastructure.”

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