In the high-stakes AI race, cloud hyperscalers are taking the lead š, with a staggering two-thirds of AI investments in 2023. Let's take a closer look.
Microsoft, Amazon and Google, have outstripped conventional VCs in 2023, closing large deals that form a significant portion of the $27bn raised by AI companies last year, as reported by PitchBook and FT.
š§° Hyperscalers are not only trying to host a multitude of AI apps in their clouds, making them accessible to customers, but they are also determined to advance their own AI capabilities through substantial investments.
The market is converging around key foundation models like OpenAI, Cohere, Anthropic, and Mistral AI, where big tech players investing billions. In response, VCs are now required to engage earlier and more strategically.
š Interestingly this graph/numbers don't even account for:
Google, which has been intensively investing in AI internally since at least 2015 and massively accelerated its efforts following the emergence of ChatGPT.
Meta, which has redirected its R&D from the metaverse to AI, now producing competitive models like Llama 2.
NVIDIA, that reported to have invested in āmore than two dozenā companies in 2023, ranging from large-scale AI platforms to startups in healthcare and energy. Nvidia participated in 35 deals in 2023, as estimated by Dealroom, placing it among the most active large-scale investors in AI.
Their investments in ānon-affiliatesā reached $872 million in the first 9 months of 2023, more than 10X in the same period in 2022 (FT).
š¤ 89% of corporate CEOs are shifting their AI focus to partnerships
In the meantime, with regulatory challenges and competitive pressures mounting, many large corporates are shifting their AI strategies from acquisitions to strategic alliances and JVs (EY research '23). This change highlights the critical role of partnerships in accessing necessary data sets, services, and markets for capitalizing on new AI opportunities.
As AI continues to transform the tech landscape, we can expect hyperscalers to enhance their AI capabilities and an increase in industry-wide partnerships to leverage AI innovations and drive growth.
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