The absurd AI mania is coming to an end
Venture capital interest in cryptocurrency has decreased significantly since the bull run of 2021. At $2.3 trillion in market capitalization, every VC wanted a piece of the industry.
The picture is now very different. Another dominant force in the market has attracted the vast majority of venture funding over the past year: artificial intelligence large language models (LLMs).
However, AI has already started showing signs of weaknesses that indicate a giant bubble ready to pop. By the time most people realize it, it will be too late.
AI dominance in the VC market started on Nov. 30, 2022, with the launch of OpenAI’s ChatGPT. From OpenAI’s perspective, it couldn’t have chosen a better time.
With the collective failures of Celsius, Voyager, Three Arrows Capital, Terra and FTX, 2022 was a crypto nightmare. The VCs desperately wanted a way out of the seemingly toxic industry to park their cash elsewhere.
Precisely 19 days after the collapse of FTX, LLMs opened up an entirely new space for VCs to venture into. ChatGPT onboarded a million users in just five days, showing unprecedented demand in the market.
That was the opening companies like Google, Microsoft, Facebook and other tech behemoths needed to jump headfirst into the chaos searching for opportunities.
Microsoft acquired a significant chunk of OpenAI and launched the Bing AI chatbot. Google launched Bard, leveraging Google AI and DeepMind, its own version of GPT. Facebook ramped up its speed on developing Llama.
While these major companies compete on core products, thousands of smaller companies have launched to get a piece of the pie. As I mentioned above, VCs went all in on AI startups.
Jasper AI, a GPT-based copywriting platform, raised $125 million at a $1.5 billion
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