CB Insights

AI startups are commanding a premium. Valuations for early-stage AI companies in 2023 were substantially higher than non-AI startups. This holds true into the mid-stages as well — AI startups raising Series B rounds notched valuations over 1.5x higher than their counterparts. AI advances, such as the emergence of generative AI, have fueled investors eager to capitalize on the trend. Meanwhile, corporate attention to AI has skyrocketed, with big tech and incumbents scrambling to harness its potential — another factor in the AI valuation premium. Despite surging interest in AI across sectors, venture funding and dealmaking to AI startups have continued to fall since 2021’s peak. In fact, total equity deals to AI startups in 2023 declined to their lowest level since 2017 — a trend felt across the venture landscape. The declines in VC dealmaking suggest investors are focusing their efforts in an industry-wide flight to quality. For the select AI startups able to capture investors’ attention right now, this gives them even more leverage to command better deal terms and higher valuations when raising.

An empowered digital workforce would reshape industries as we know them. The implications would be enormous, changing how companies hire and scale, as well as what they can achieve with a small headcount. That future isn’t too far off. The idea of autonomous AI agents — LLM-powered bots that can independently reason and execute tasks — caught on like wildfire in 2023, marking an important evolution beyond chatbots and copilots. While much of the tech remains limited in its ability to execute tasks reliably, use cases are gaining traction in horizontal enterprise applications like customer support, sales, and engineering. We mined CB Insights startup, financing, business model, and buyer interview data to map the evolving landscape and analyze its future: https://cbi.team/3XjYmNE

The cost of 1M tokens is 240x cheaper than it was 18 months ago. If you aren’t already, companies should be building on LLMs with a view that costs will continue to decline. Explore the exploding genAI ecosystem with our market map here: https://cbi.team/4dYVeMy

We identified 52 startups poised to have a successful exit in the next five to ten years. Now, our expert is revealing these emerging players. Learn why these up-and-comers are on our radar, and how they can help you identify future competitors, partners, markets, and acquisition targets: https://cbi.team/3X71Di4

As August comes to a wrap, we're highlighting notable deals, partnerships, and big tech activity in generative AI this month: Moonshot raises $300M ➡️ Moonshot AI is a China-based startup developing large language models (LLMs) and consumer facing Al applications. Amazon acquires Perceive ➡️ Amazon acquired Al processor company Perceive for $80M, with the aim to integrate Perceive's neural network inference solutions into its Devices & Services unit. Google Launches Gemini Live ➡️ Google launched its hands-free mobile conversational Al, Gemini Live, which integrates with Google into the Android experience to provide context aware answers without users having to switch apps.

Google is facing the heat. Earlier this month, a US judge ruled that Google was illegally maintaining an internet search monopoly. It’s also being pushed to lean into AI to defend its position, rolling out AI Overviews to users in the US in May. Google faces a new crop of AI search players — notably led by the unicorn Perplexity. But can Perplexity actually threaten Google? We look at the strategies the startup is using here: https://cbi.team/4e0TJxr

Evaluate a private company’s past, present, and future potential – all in one place. Our new Company Outlook view consists of three proprietary metrics: ▪️ Commercial Maturity: Where a company is in its lifecycle ▪️ Mosaic Health: Its performance over time ▪️ Exit Probability: Its future trajectory Use it to triangulate on the right business partners and opportunities, fast. We’ll show you how: https://cbi.team/46XbknJ

In 2017, 8 Google researchers published a paper introducing a new neural network architecture called the “Transformer” that could better understand and generate human language. The Transformer paper was a major breakthrough in the field of natural language processing, and it helped to enable more advanced language models, like the ones being developed by OpenAI. Most of the researchers behind this paper have gone on to found companies and raise significant financing, often at large valuations. For example, members of this group have founded genAI unicorns Cohere, Character.AI, and Adept. Other impressive former Google employees — i.e., members of its alumni network, or “mafia” — are founding companies in areas ranging from fintech to entertainment tech to workplace automation. Using the CB Insights Mosaic algorithm, we evaluated the management team strength of Google alum-founded companies to identify 10 key early-stage players: https://cbi.team/3WN1qAj

OpenAI is doing more M&A deals. In the last year, it’s picked up: ▪️ Global Illumination, Inc: an AI design studio building creative tools and infrastructure. ▪️ Multi: a video platform for remote team collaboration across shared screens. ▪️ Rockset (acquired by OpenAI): developed an approach to speed up data retrieval and processing for AI systems. Notably, the Rockset and Multi acquisitions, which were announced in June 2024, highlight OpenAI’s focus on bolstering its enterprise offerings. Multi’s team is reportedly joining OpenAI’s ChatGPT desktop unit, while Rockset’s tech could boost OpenAI’s real-time data capabilities for enterprise applications like financial analysis. Here’s what the AI-driven Acquisition Insights on CBI thinks about the rationale for these moves 👇

In Q2’24, cybersecurity funding climbed 85% QoQ to reach its highest level in 2 years. This jump was bolstered by a $1B round to cloud security startup Wiz — the largest cybersecurity equity funding round of 2024. Now valued at $12B, Wiz recently rejected Google’s $23B takeover offer in favor of an eventual IPO. The company is reportedly growing at an eye-watering 100% YoY and is expecting $1B in revenue this year. Dive deeper into the latest trends in cybersecurity: https://cbi.team/3YNtztU