Hello there, AI gold rush - The Hustle
The Hustle

Hello there, AI gold rush

AI startup valuations

Olivia Heller

When we asked ChatGPT to write an intro about an AI gold rush, it told us to put on our “virtual cowboy hat”… and well, it’s hard to argue with the driving force of a multibillion-dollar boom.

Already, in 2023, VC firms have plowed $3.6B into 269 AI companies in the US.

In the past month, Cohere has reportedly been in talks to raise money at a $6B+ valuation, and Stability AI was said to be seeking a $4B valuation. Last week, Anthropic, after raising $400m and notching a $4.1B valuation, raised another $300m. This week, Adept raised $350m at a $1B+ valuation.

At least 50 companies being incubated at Y Combinator are focused on the space. Mobius AI, founded by four AI researchers at Google barely with an idea, was recently valued at ~$100m just a week after launch.

What’s that phrase about gold rushes? Sell shovels?

Many AI startups may struggle to outgun Big Tech’s armies of engineers and widespread distribution.

Sam Lessin, a venture capitalist at Slow Ventures, told The New York Times, “The absolute vast majority of the [AI] spoils will go to the incumbents” and that the best way to invest in AI is through Big Tech stocks.

BTW: Yes, there is a $58m AI-focused “hacker house” in San Francisco. That’ll buy a whole lot of virtual cowboy hats.

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