AI Startups Raise Millions Without Revenue or Products
30 April 2024: Financial Times Licenses Content to OpenAI, AI Blood Test Predicts Postpartum Depression Risk, ChatGPT's 'Memory' Feature for Subscribers
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1. 1-Minute Roundup
2. Headlines
3. AI Investment Deals
4. Other AI News
1-Minute Roundup
Headlines:
AI startups secure massive funding rounds despite a lack of revenue or products
Infographics on AI Job Impact & AI Patents
AI Investment Deals:
MindAffect raises €1.1M for AI-driven hearing diagnostics
BioIntelligence Technologies secures $5M to enhance bioprocess efficiency with AI
Blaize raises $106M to advance edge AI computing
Thintronics Inc. secures $23M for advanced insulator technologies for AI datacenters
Assert AI raises $4M to enhance its AI computer vision SAAS presence and R&D
Klineo secures €2M to improve cancer patient access to clinical trials
Indigitall raises €6M to expand its AI marketing automation services globally
Others:
Financial Times licenses content to OpenAI and collaborates on AI tools
Taiwan stocks see $5B outflow in April as AI rally cools
Dionysus Digital Health develops AI blood test to predict postpartum depression risk
ChatGPT's 'Memory' feature is now available for paying subscribers
Samsung's profit surges as AI boom boosts chip division
Headlines
AI Startups Raise Millions Despite Lack of Revenue or Products
AI startups are raising massive funding rounds, often in the hundreds of millions, before having a product or revenue as investors bet on AI's potential to revolutionise industries. However, the lack of proven business models and the high costs of developing AI technology have skewed economics and raised concerns about valuations.
Why it Matters: The AI funding frenzy highlights the excitement surrounding the technology's potential but also raises questions about the sustainability of investments and the ability of startups to deliver on their promises.
Zoom In:
Imbue, an AI startup, raised over $210 million and hit a $1 billion valuation without a product or business
Inflexion AI raised $1.5 billion but struggled to find a working business model, leading to a major restructuring
Other well-funded startups like Character AI and Magic AI generate little to no revenue
Numbers:
Investors poured $21.8 billion into generative AI deals in 2023, a fivefold increase from the previous year (CB Insights)
The industry spent around $50 billion on Nvidia chips to train language models, while generative AI startups brought in only $3 billion in revenue (Sequoia Capital estimates)
Reality Check: Most companies have hesitated to increase spending on generative AI, which remains error-prone and expensive. This has led some investors to urge a more cautious approach to valuing startups.
Big Picture: The AI funding rush is reminiscent of past startup booms, but the large sums being invested at early stages, coupled with the lack of proven business models, have heightened concerns about a potential bubble.
Infographics Of The Day
AI Investment Deals
MindAffect secures €1.1M for AI-driven hearing diagnostics; aims to help over 1.6 billion with diagnostic challenges.
BioIntelligence Technologies secures $5M to enhance bioprocess efficiency with AI; aims to expand in America and Europe.
Blaize raises $106M to advance edge AI computing, supported by existing and new investors for global expansion.
Thintronics Inc. secures $23M in Series A funding led by Maverick Capital and Translink Capital; targets advanced insulator technologies for AI datacenters.
Assert AI, an AI computer vision SAAS startup, raises $4M to enhance its presence and R&D in key global markets.
Klineo secures €2M to enhance access to clinical trials for cancer patients and plans to expand services globally.
Indigitall, a leader in AI marketing automation for Spanish-speaking markets, raises €6M to expand in Latin America, Spain, and the US.
Others
Financial Times Licenses Content to OpenAI and Collaborates on AI Tools
The Financial Times has agreed to license its content to OpenAI for use in ChatGPT queries.
In exchange, OpenAI will work with the FT to develop new AI products and tools.
Taiwan Stocks See $5B Outflow in April as AI Rally Cools
Taiwanese stocks experienced the most significant monthly outflow in six months, with $4.9 billion withdrawn in April.
Concerns grow that the market's AI-driven rally has reached a short-term peak amid frothy valuations.
AI Blood Test Aims to Predict Postpartum Depression Risk
Dionysus Digital Health has developed an AI-powered blood test to identify the risk of postpartum depression.
The test compares epigenetics in blood samples with benchmarks developed through years of research.
ChatGPT's 'Memory' Feature Now Available for Paying Subscribers
OpenAI has made the Memory feature available to ChatGPT Plus subscribers outside Europe and Korea.
Memory allows ChatGPT to remember user preferences and details, enabling more personalised responses.
Samsung's Profit Surges as AI Boom Boosts Chip Division
Samsung's net income rose more than four-fold to 6.62 trillion won ($4.8 billion) in Q1 2024.
The company's chip division posted a 1.91 trillion won operating profit, driven by AI-related demand.
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