ChatGPT Has Sparked A Big Interest In Funding For AI Companies

The rapid development of generative artificial intelligence (AI) has sparked a gold rush as investors pour billions of dollars into startups specializing in this area. Following the release of OpenAI’s ChatGPT platform last November, several tech giants including Google and Alibaba have raced to release their own versions.

This new technology has been integrated into customer services, marketing, and software development and is making its way into various fields, and that too, quite rapidly. However, concerns have been raised about the potential impact on employment and the possibility of AI starting to control humans. Even Elon Musk, who has previously warned of the dangers of AI, has announced plans to launch a rival to ChatGPT.

“The next two to three years will define so much about generative AI,” David Foster, cofounder of Applied Data Science Partners, a London-based AI and data consultancy, told DW. “We will talk about it in the same way as the internet itself — how it changes everything that we do as a human species.”

While generative AI is being integrated into tools companies already have, it is still far from perfect and requires human input. However, an even more intelligent upgrade, ChatGPT-4, was recently released, and version 5 is rumored to be released by the end of the year.

Another advancement, AutoGPT, can further automate tasks that ChatGPT needs human input for. Corporate investment into AI has grown 150% since 2019 to nearly $180 billion, and the number of public AI projects rose to nearly 350,000 by the end of last year.

“You have a new market emerging, a bit like when the [smartphone] app stores opened up. Small startups will make creative use of the technology, even though they didn’t create it themselves,” author and AI researcher Thomas Ramge told DW.

The US has up till now led the world in AI development, but China has recently caught up along with India. China is now responsible for 18% of all high-impact AI projects, compared to 14% for the US, according to Deutsche Bank.

“The Chinese government has been regulating AI because they see very clearly that it could cause them to lose control,” AI expert and MIT professor Max Tegmark told DW. “So they’re limiting the freedom of companies to just experiment wildly with poorly understood stuff.”

Startups can focus on adapting current generative AI platforms for specialist uses, including cures for cancers, smart finance, and gaming. While the enthusiasm of early adopters will likely have a massive snowball effect, analysts warn of a new dot-com bubble.

If there is someone who hasn’t been able to catch up to US and Asia in generative AI space, it’s Europe and its investors being risk-averse.

“Same old story. Europe is lagging behind,” Ramge said. “It did not foresee this trend and is once again claiming it will be able to catch up.”

Ramge highlighted two potential stars — a German plan to create a European AI infrastructure known as LEAM, and the Heidelberg-based startup Aleph Alpha, despite the latter raising just $31.1 million to date, versus OpenAI’s $11 billion.

“What Europe is not able to do is to transfer the knowledge out of the universities into rapidly growing startups — unicorns — that in the end are able to bring the new technology to the world,” he told DW.