What do VCs bet on


Based on data from PitchBook, the funding of AI agreements continued at a breakneck pace. In the last quarter, the amount invested reached a record $ 31.6 billion. Note that there were 11 deals made for over $ 500 million.

Certainly, many of these startups will disappear or even go bankrupt. But of course, some will end up disrupting industries and changing the landscape of the global economy.

“To be confused you have to believe that the AI ​​is going to make recommendations 10 times better than what is available today,” said Eric Vishria, who is a general partner at Reference. “I think this is likely to happen in very complex, high dimensional spaces, where there are so many intertwined factors at play that it’s really hard to find correlations through standard analytical techniques.”

So which industries are vulnerable to disruption from AI? Well, let’s see where some of the best VCs are investing today:

Software development: There have been advances in DevOps and IDEs. Yet software development remains labor intensive. And it doesn’t help that it is extremely difficult to recruit qualified developers.

But AI can make a big difference. “Advances in state-of-the-art natural language processing algorithms could revolutionize software development, first by drastically reducing the ‘one-size-fits-all’ code software developers write today and in the long run by writing applications. whole with little human help, ”said Nnamdi Iregbulem, who is a partner at Lightspeed Venture Partners.

Consider using GPT-3, which is a neural network that trains models to create content. “Products like GitHub Copilot, which are also based on GPT-3, will also disrupt software development,” said Jai Das, president and partner of Sapphire companies.

Cyber ​​security: It’s one of the biggest software markets. But the technologies really need retooling. After all, there continues to be more and more breaches and hacks.

“Cyber ​​security is likely to turn into an AI vs. AI game very soon,” said Deepak Jeevankumar, CEO of Dell Technologies Capital. “Sophisticated attackers are already using AI and bots to overcome defenses.”

Construction: This is a massive industry that will continue to grow as the world’s population continues to increase. Yet construction has seen relatively small amounts of IT investment. But AI could be a game-changer.

“A 1% incremental increase in efficiency can mean millions of dollars in cost savings,” said Shawn Carolan, who is a managing partner at Menlo Ventures. “Many companies, like Openspace.ai, are doing transformational work using AI in the construction space. Openspace relies on AI and artificial vision to essentially become a photographic memory for construction sites. It automatically downloads and assembles images of a construction site so that customers can take a virtual tour and monitor the project at any time.

Talent management: HR has generally lagged behind innovation. The point is, many processes are manual and inefficient.

But AI can certainly be a solution. In fact, AI startups like Eightfold.ai were able to record substantial growth in the HR category. In June, the company announced funding of $ 220 million, led by SoftBank Vision Fund 2.

“Every business talks about talent as a key priority, and companies that embrace AI to find better candidates faster, cheaper and at scale have a real competitive advantage,” said Kirthiga Reddy, who is a partner. at the house of SoftBank. “Understanding how to use AI to amplify interactions in the talent lifecycle is a differentiator and a benefit for these companies. ”

Drug discovery: The development of Covid-19 vaccines – by companies like Pfizer, Moderna and BioNTech – has highlighted the power of innovation in the healthcare sector. But despite this, there is still a long way to go. The point is, drug development is expensive and time consuming.

“It becomes impossible to process these large datasets without using the latest AI / ML technologies,” said Dusan Perovic, partner at Two Sigma companies. “Companies that quickly adopt these data science tools and are thus able to analyze larger data sets will grow faster than companies that rely on older data analysis tools. “

To M (@ttaulli) is an advisor / member of the board of directors of startups and author of Artificial Intelligence Basics: A Non-Technical Introduction, The Robotic Process Automation Handbook: A Guide to Implementing RPA Systems and Implementing AI systems: transform your business in 6 steps. Hhas also developed various online courses, such as for the COBOL.



Margie D. Carlisle