Generative AI
The 2024 landscape across enterprise and vertical platforms.
Hey Readers,
Welcome to New Economies, where we explore the latest tech trends and ecosystems. In this edition, we explore the progression of Generative AI over the last 18 months, uncovering the latest 270+ startups driving innovation across enterprise and vertical platforms as well as highlighting predictions of what we should expect in the near future.
Generative AI
In November 2022, ChatGPT was bursting throughout the tech ecosystem which attracted a million users in its first week and 100 million within months. At the same time, there were just a few hundred Gen AI startups. Today, the landscape has expanded quite significantly, with thousands now innovating across enterprise and vertical applications.
Not only are we increasingly using tools like ChatGPT daily, but many of us will soon depend on these platforms regularly. Startups are rapidly emerging throughout the ecosystem, attracting significant investment. For instance, in YC's W24 batch, 70% of startups had a focus on AI.
Throughout this edition of New Economies, we will be discovering:
What is Generative AI
The last 18 months
The latest 200+ enterprise platforms
The latest 70+ vertical platforms
The most active investors
Characteristics in the platforms featured across our market maps
Where Generative AI goes from here
And more! Time to unpack!
What is Generative AI
For those new to the space - Generative AI, employs machine learning algorithms to independently generate distinctive content such as images, music, and text in response to specific prompts. For example, you can use the following platforms that will support and perform tasks for you:
Runway can generate images from text prompts. For example, if you input 'a dog sitting by the window with rain outside,' the platform will produce corresponding images.
OpenAI offers various functionalities such as translating content into different languages, checking for spelling errors, improving text and summarising data.
OpusClip is another tool that quickly transforms long-form videos into short-form clips, among other capabilities.
The last 18 months
The last 18 months have been a surreal time for Generative AI (and AI in general). ChatGPT now has over 200 million active users, while Elon Musk's x.AI raised a record-breaking $6 billion. Additionally, European AI company Mistral, launched in 2023, secured $645 million in funding. Alongside these milestones, AI Agents are beginning to emerge, potentially replacing certain jobs—a topic we explored in our recent newsletter covering startups in this space. If you missed it, you can find it here.
Fundraising Activity
All of this has taken shape in just a few years. Today, startups typically require a significant capital injection to launch and succeed if they want to become one of the hero platforms, and funding into AI platforms underscores the high demand for such technologies. Data from Crunchbase highlights ongoing investor appetite and engagement in AI-related companies.
For instance, in February 2024 alone, more than a fifth of all venture funding was allocated to AI companies, totalling $4.7 billion. This marked a significant increase from the $2.2 billion invested in January 2024 and the $2.1 billion in February 2023, according to Crunchbase.
What is driving Generative AI and what should we expect next
Generative AI is gaining momentum because today's technology allows computers to learn from vast amounts of data to create new content that looks and sounds real. Think of it as a smart artist that learns from thousands of paintings to produce its own unique artworks, indistinguishable from those created by humans. This capability is becoming increasingly powerful thanks to faster computers and advanced software, enabling the creation of realistic photos and original music compositions.
Similar to previous transformative technologies such as mobile, cloud computing, and the internet, this shift is poised to spawn innovative businesses that will yield substantial economic and societal benefits (and challenges) in the long run.
What have we seen develop over the last 18 months?
Over the last 18 months, we’ve seen a number of developments across language models, content generation to interactive AI. Some of the developments we have seen include:
Language Models
Breakthroughs in large-scale language models like GPT-4 have enabled more sophisticated text generation and understanding capabilities.
Ethical Considerations
Increased focus on the ethical implications of generative AI, including issues related to bias, misinformation, and privacy concerns.
AI in Art and Media
Growing adoption of generative AI in art, media production, and entertainment industries for creating visuals, music, and stories. As well as within the creator economy where creators can now translate their content into any language or use platforms to generate their long form video content into short form content within minutes.
Generative Health
Expanded use of generative AI in scientific research for drug discovery.
Regulatory Developments
Emerging regulatory frameworks and guidelines addressing the deployment and governance of generative AI technologies.
This just gives you an idea how quickly AI has moved, and how it continues to evolve. So, who are the founders and startups disrupting this space?
The Landscape: Enterprise Platforms
Our 2024 Generative AI Market Maps discover the latest startups building in the space by enterprise and by vertical.
Disclaimers:
Not every Generative AI Enterprise platform is listed
The majority of these startups are early stage. At the date of publication, the startups appear to be operating
Some platforms may be suited in featuring in more than one sub category. We categorised each startup based on how they describe themselves on their marketing website
Some of these platforms are also suited as consumer products, not just enterprise platforms.
If we have missed you, please comment on the latest Generative AI post here and we’ll consider featuring you next time.
Descriptions for each category:
Dev Tools: Generate code and fix bugs
Video: Generate videos
Text: Generate text
Voice: Generate voice content
Design: Generate and improve designs
Image: Generate images
Customer Engagement: Automate customer support and engagement
Sales: Generate sales pipeline
Content Creation: General content creation
Search: Search engines
Avatars & Dubbing: Generate avatars and content translation
Create Chatbots: Create chatbots
SEO: Generate SEO
Data Generation: Generate and analyse data
Productivity: Productivity tools
Foundation Models & LLMs: Foundation Models & LLMs
Legal: Generate and analyse legal docs
Make Presentations: Generate presentations
Insights:
Generative AI is no longer just being applied within categories image, text, video and voice which we saw in Dec 2022. Generative AI is now being applied to across multiple categories
I’m surprised we haven’t seen more companies being built in voice. Perhaps this is harder to execute than anticipated
The pre-seed, seed and Series A platforms have raised over $1B
U.S and the U.K continue to be countries where a number of these platforms are HQ’d
The majority of platforms featured are pre-seed, seed and Series A startups.
The Landscape: Vertical Platforms
On top of the enterprise type of Generative AI platforms, since December 2022, we have seen a new trend where a number of Generative AI platforms are emerging with a focus on one vertical.
The Generative AI vertical platforms are still relatively new however we’ve picked a few categories that we think are most interesting and where we see a number of startups building as demonstrated below.
Descriptions for each category:
Music: Supporting creators with their music
Health: Analyse health results
Edtech: Virtual tutors
E-Commerce: Generate virtual fits, recommendations and more
Gaming: In-game designs
Hospitality: Voice agents for taking orders
Financial Services: Generating decisions and workflows
*Disclaimer*
Not every Generative AI vertical platform is listed.
Insights:
Although the vertical Generative AI companies are still early and relatively new, I predict we will see many more companies being featured next year
Music, Health, Education and Gaming appear to have promising innovation. Verticals across the likes of Hospitality and Financial Services are still early however they may be categories to watch.
Characteristics from platforms listed:
When we look at the platforms featured across the market maps, there are a couple of wider characteristics we can learn from the startups:
Insights:
The top six countries where these platforms are HQ’d include: U.S, U.K, Germany, India, Israel & Canada
Most companies launched between 2020 - 2024
Top investors include: Sequoia, YC, Andreessen Horowitz and others.
Access the data in full
The Challenges and Opportunities
Ethical and Social Implications
Generative AI introduces profound ethical and social challenges that must be addressed as the technology advances. Issues like data privacy, the potential for misuse in creating deceptive content (such as deepfakes), and the reinforcement of biases in generated outputs are critical concerns.
Ensuring responsible deployment requires rigorous oversight and frameworks for accountability to mitigate these risks. Moreover, the societal impacts of generative models, including their influence on creative industries and the broader dissemination of information, necessitate careful consideration and proactive measures to uphold ethical standards and safeguard societal well-being.
The lack of in-house AI experts
As the platforms mature, companies will probably have to consider hiring in-house AI experts who would be responsible for implementing AI into their organisation.
The Creator Economy
If you’ve read my previous reports covering The Creator Economy, I have always highlighted how amazing it would be for creators to turn their content into any language using their voice. This allows creators to be global from day one, not just a local one. This is now reality with platforms such as ElevenLabs offering this solution to creators. The challenge will be perfecting the translation and lip-syncing.
Education
Every student in the near future should be able to have a form of virtual tutor. If every student was provided this at no cost, one wonders what difference this would make.
Healthcare
I am personally particularly excited for healthcare where we all in the coming years, should be able to access some of the best healthcare in the world for a fraction of the price vs before.
Generative AI becomes globally adopted
You may think Generative AI is just having an impact across developed tech markets however, it’s having a global impact. If we take Thailand for example, where there are only ~180 Thai-based startups who have received funding–according to a recent report by PWC Thailand, 36% of local CEOs’ have adopted Generative AI across their company with 52% also saying, Generative AI will improve the quality of their respective products or services.
Market Sizing & Summary
According to Bloomberg, Generative AI has the potential to become a $1.3 trillion by 2032.
And it’s not surprising to see how we as consumers and companies are starting to adopt AI platforms in our daily lives. According to recent research by Statista, ‘‘During a 2023 survey conducted among professionals in the United States, it was found that 37 percent of those working in advertising or marketing had used AI to assist with work-related tasks. Healthcare, however, had the lowest rate of AI usage with only 15 percent of those asked having used it at work.’’
Rate of generative AI adoption in the workplace in the United States 2023, by industry
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