Where Are All the Early AI Unicorns Now?
It’s super quiet right now. There’s little or no sign of the early AI unicorns that were once flying high above the rainbow in cotton candy skies with their cute cat-like ideas. Source: (ImgFlip) Let’s see what they are up to now. According to several reports, Stability AI is treading on very unstable ground. Several developers, who worked on the company’s most important product, Stable Diffusion, are resigning. CEO Emad Mostaque said that three of the five researchers have left the company. Investors too have been pretty unhappy with Mostaque’s leadership, and the startup is now up for sale. It is hard to remain on top of the AI game when there is so much competition. Many AI startups that tasted success initially are now lost amidst all the announcements and generative AI news. Another such case is Jasper. The AI content platform based in Austin, became a unicorn after raising $125 million in a Series A funding round led by Salesforce at a $1.5 billion valuation in October 2022. In September 2023, the company’s CEO was changed. Timothy Young, the former president of Dropbox was appointed as the CEO, replacing Dave Rogenmoser. This was discussed as a highly suspicious move in the VC and generative AI startups circles. The worst is that this came after the company announced layoffs, just months after its funding round. The same month, Jasper reportedly reduced the internal worth of its ordinary shares by 20%, as informed by ex-employees who received notifications from the company. This decline suggests a deceleration in the advancement of its AI-driven writing tool tailored for marketers. While Jasper has historically depended on OpenAI’s GPT-3 to fuel its product, the emergence of ChatGPT by OpenAI last autumn has essentially positioned it as a direct rival. It has always been touted that whenever OpenAI releases a new update, a lot of startups are killed. Moreover, there has been a lot of hype around investing in generative AI startups that do not have any moat, resulting in a failed investment. Muffled voices Former Adobe CTO’s startup Typeface last raised a funding of $100 million in June 2023, becoming a unicorn. The generative AI for brand startup has been quiet ever since its competitors began to rise in the field. On the other hand, startups such as Synthesia, Runway, Cohere, Coreweave, and Replit have all been coming up with new features. The only thing that still remains undiscussed is these companies’ road to profitability. Though they all have some or the other revenue model in place for customers, the cost of running the models is still exceptionally high. Before OpenAI announced Sora, there was another AI-powered filmmaking platform called Lightricks. The company which raised $130 million funding in September 2021, reaching a valuation of $1.8 billion, also laid off 80 of its employees, which was around 12% of its workforce. It continued to raise several rounds of funding after that and released LTX Studio just last month. If we take a look at the recent Instoried debacle, it gives away the sense and nature of AI investments globally. The company started seven years ago with the motivation of adding empathy to users’ content and pitched the idea of AI, but it didn’t really become a unicorn. Cut to present, there is almost no sign of the company, which according to the now-deleted LinkedIn profile claimed to have created ChatGPT way back in 2019. Inflection AI, the company that hit the news because two of its co-founders left to join Microsoft AI also raises eyebrows about the investment hype in the earlier AI boom. The company’s future remains hazy even though it raised billions of dollars and became a unicorn. Another success story is that of Glean, the AI-powered work assistant startup founded by Arvind Jain. Just a month back, the unicorn raised $200 million at $2.2 billion valuation in a series D round. It has also announced going on a hiring spree as the demand for its enterprise AI solution is on the rise. Leaving everyone else behind is the success story of Hugging Face, Character.ai, and Adept AI that show that not all generative AI unicorns are on the negative track. These startups have been raising funds and partnering with many almost every second month. Only the ones that raised funds without a moat to defend against big-tech and OpenAI are on the decline. Only time will tell what happens to the AI unicorns that have been raising funds over the past year, such as Ola’s Krutrim, which recently became India’s first and fastest AI unicorn.
The text-to-image giant Stability AI is in trouble. While others like Glean are on the rise, Jasper is slowly vanishing, and the layoffs are constant.
Stability AI is in trouble. While others like Glean are on the rise, Jasper is slowly vanishing, and the layoffs are constant.
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["Replit", "Go", "ChatGPT", "Hugging Face", "OpenAI", "AI", "GPT", "Aim", "stable diffusion", "generative AI", "R"]
["AI", "generative AI", "ChatGPT", "OpenAI", "Aim", "Hugging Face", "R", "Go", "GPT", "stable diffusion"]
Mohit writes about AI in simple, explainable, and often funny words. He's especially passionate about chatting with those building AI for Bharat, with the occasional detour into AGI.