This year’s crop of hot startups shows that generative AI isn’t the only game in town.
What’s new: CB Insights, which tracks the tech-startup economy, released the 2023 edition of its annual AI 100, a list of 100 notable AI-powered ventures. The researchers considered 9,000 startups and selected 100 standouts based on criteria such as investors, business partners, research and development activity, and press reports.
Where the action is: The list divides roughly evenly into three categories: Startups that offer tools for AI development, those that address cross-industry functions, and those that serve a particular industry. The names of the companies are noteworthy, but the markets they serve are more telling.
- The AI tools category is dominated by ventures that specialize in foundation models and APIs (five companies including familiar names like OpenAI and Hugging Face) and machine learning development and deployment (four). AI chips, model validation/monitoring, and vector databases are represented by three companies each (including WhyLabs and Credo — both portfolio companies of AI Fund, the venture studio led by Andrew Ng).
- Among cross-industry startups, the largest concentrations are in AI assistants, privacy/security, sales/customer support, and search (four companies each). Code generation has three entries.
- The industry-focused startups concentrate in healthcare (eight companies) and media/entertainment (six). Agriculture, auto/mobility, energy, fashion/retail, finance, gaming, and materials/manufacturing are represented by two companies each.
Follow the money: Together, these startups have raised $22 billion in 223 deals since 2019. (Microsoft’s investment in OpenAI accounts for a whopping $13 billion of that total.) Half are in the very early stages.
- Venture capital is flowing to generative applications. The media/entertainment category is full of them: Character.ai provides chatbots that converse in the manner of characters from history and fiction, Descript helps amateur audio and video producers automate their workflow, Flawless provides video editing tools that conform actors’ lips to revised scripts and alternative languages, Runway generates video effects and alterations, and Wonder Dynamics makes it easy to swap and manipulate characters in videos.
- Some of the most richly capitalized companies in the list focus on safe and/or responsible AI development. For instance, Anthropic, which builds AI products that emphasize safety, received $300 million from Google. Cohere, which builds language models designed to minimize harmful output, recently raised $270 million.
Why it matters: Venture funding drives a significant portion of the AI industry. That means opportunities for practitioners at both hot ventures and me-too companies that seek to cultivate similar markets. The startup scene is volatile — as the difference between this year’s and last year’s AI100 demonstrates — but each crop of new firms yields a few long-term winners.
We’re thinking: Startup trends are informative, but the options for building a career in AI are far broader. Established companies increasingly recognize their need for AI talent, and fresh research opens new applications. Let your interests lead you to opportunities that excite and inspire you.