Dive Brief:
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Artificial intelligence technology providers such as Open AI and Anthropic have collectively raised more than $50 billion in total lifetime private funding, highlighting the strength of the rapidly growing market, according to a recent report from the research firm Everest Group.
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OpenAI, which has raised a total of $11.3 billion since the San Francisco, California-based startup was founded in 2015, leads the list of the top 50 AI vendors by funding as of September 30, according to the analysis. Anthropic ranks second with $5.55 billion and Databricks ranks third with $3.95 billion.
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“With its breakthrough innovation, AI continues to reshape industries, optimize processes and redefine human-machine interactions,” the report said. The technology has sparked “substantial” interest, spawning more than 5,000 vendors in the past decade alone, he said.
Diving knowledge:
This month marks one year since the debut of OpenAI’s game-changing “generative AI” tool known as ChatGPT, whose explosive success has sparked a race for AI investment among large technology companies.
As ChatGPT turns one year old, OpenAI faces the challenge of shrugging off any fallout from recent leadership turmoil at the startup as it also grapples with regulatory scrutiny and increased competition.
On November 17, OpenAI announced the abrupt departure of its CEO, Sam Altman. The company’s action, which prompted a backlash from its employees and reportedly blindsided and angered Satya Nadella, the CEO of Microsoft, a major backer of OpenAI, was reversed in less than a week
Microsoft announced a multi-million dollar investment deal with OpenAI in January. Other big AI-related venture capital deals this year include Amazon’s deal to invest up to $4 billion in OpenAI rival Anthropic.
“[I]It is important to recognize that the remarkable progress in AI owes much of its success to the substantial contributions of broad-based technology providers such as Microsoft, Google, AWS. [Amazon Web Services]IBM and Meta,” the Everest Group report said. “These vendors have been instrumental in driving the advancement and widespread adoption of AI.”
The United States is home to the majority of AI technology providers (70%), but new ones are emerging globally, the study found. China follows the US with a share of 12%. Other countries, such as the United Kingdom, Canada, Israel, Germany and France, have much smaller shares.
According to S&P Global Market Intelligence, revenue from generative AI offerings across a wide range of categories is expected to reach $3.7 billion this year and expand to $36 billion by 2028.
AI-related terms were mentioned a total of 7,358 times in the earnings calls of S&P 500 companies in the second quarter, 4.6 times more than the previous quarter and 3.3 times more than in in the fourth quarter of 2022, according to Business Insider.
In August, OpenAI said that ChatGPT had been adopted by 80% of Fortune 500 companies. Earlier this month, Altman said that 100 million people were going to ChatGPT weekly, and that the company had more than 2 million of developers building with its application programming interface or API. He highlighted the milestones during a keynote speech at the company’s first developer conference in San Francisco, as previously reported by CFO Dive’s sister publication CIO Dive.
Meanwhile, the rapid rise of ChatGPT and generative AI in general is sparking a national and global debate about the need for guardrails to address the technology’s potential risks, ranging from disinformation to data leaks.
A July study conducted in London cyber security company CybSafe found that 89% of workers were sharing confidential information with AI tools. Some of the workers surveyed (32% in the UK and 33% in the US) said they would likely continue to use technology even if their employer banned it.
“As generative AI infiltrates the workplace, it is building a cyber-superhighway for criminals,” Jason Nurse, director of science and research at CybSafe, said in a press release when the research was announced.
A broad executive order signed by President Joe Biden in October calls for the Labor Department to lead the development of a set of standards to guide companies in addressing AI’s potential harms to their workers, including eroded privacy and work commuting. It also directs the Commerce Department’s National Institute of Standards and Technology to establish guidelines to promote “safe, secure and reliable” AI systems.
Members of Congress, including Senate Majority Leader Chuck Schumer, D-N.Y., are also focused on the issue.
As the AI debate heats up, Federal Trade Commission Chairwoman Lina Khan has pledged to monitor the market using the agency’s existing legal authorities. The commission is investigating whether OpenAI has violated consumer protection laws by putting reputations and personal data at risk, according to a July Washington Post report. As part of the investigation, OpenAI was asked to provide detailed descriptions of all complaints it has received about its products making “false, misleading, derogatory or harmful” statements about people, according to the report.
