Top 6 AI Investing Trends for 2023
We review key AI trends that have attracted ~$260B in VC funding over the last decade
Alumni Ventures’ portfolio features an array of innovative startups leveraging artificial intelligence (AI), machine learning (ML), and big data for unique, impactful applications. AI’s ability to solve complex problems across a variety of industries has made it an increasingly attractive technology for both investors and entrepreneurs.
Over the last decade, AI funding has accounted for roughly 10% of global VC dollars, with more than $257 billion in funding from 2013 to 2022. That momentum is expected to continue in 2023, as IDC projects that companies will spend over $500 billion on AI solutions.
AV is leaning into the sector, with our ~50 experienced investment professionals monitoring key AI trends to identify promising opportunities. The following highlighted investments from our first AI Fund and broader portfolio reflect the types of companies we aim to source for our next vintage, as well as for future Alumni and Focused Funds.
AI Fund 3 Open Through August 31
Our AI Fund will invest in a diversified portfolio of ~20-30 companies applying AI, machine learning, big data, and related technologies. The fund will be invested over ~12-18 months with a large reserve (~20-25%) for follow-on opportunities. AI Fund 2 was oversubscribed, and we had to establish a waitlist to accommodate interest. Click below to review fund materials or connect with a Senior Partner to learn more.
Enterprise
One of the most useful aspects of AI / ML technologies is their ability to scale exponentially. From responding in real time to customer queries to analyzing images and records that would take humans hundreds of years to manually review, AI offers unparalleled bandwidth. As organizations integrate AI into their core business models, their ability to solve larger problems and provide more services to customers will grow.
Sample AI Enterprise Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s AI Fund.
1UP offers an AI-powered competitive intelligence platform designed to give leading companies real-time information on their competitors.
EvaBot operates a unique corporate “gifting-as-a-service” platform that digitizes and personalizes the relationship management process.
Replicant is an autonomous contact center that solves customer problems over the phone. Their voice AI, trained on over 30 million customer service calls, provides human-like customer service on the phone and in chat.
Ware designs self-flying drones that automate inventory tracking — increasing accuracy and efficiency, while saving money. Ware’s processing of drone data also helps companies optimize use of warehouse space.
AI Development
AI can also be used to improve or create new AI tools. In this case, AI becomes a force multiplier, allowing engineers, developers, and designers to prototype and train new products and models for virtually any application. This will increase the accessibility of AI over time, lowering the barrier of entry for those who want to leverage the tech in existing or new markets.
Sample AI Development Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s AI Fund.
Chooch is an end-to-end computer vision platform that replicates human visual intelligence to generate fast, accurate AI models for a wide variety of industries.
Masterful AI enables any developer to build a production-grade ML model without days and weeks of experimentation or paying an army of human data handlers.
Synthesis AI is pioneering the use of synthetic data to build a more capable computer vision model for applications like teleconferencing, identity verification, driver monitoring, and digital humans.
Syntiant offers a digital Neural Decision Processor and AI computing solution for low-power, always-on devices. Their solution works for everything from smartphones to laptops, autos, earbuds, and virtual assistants.
Xanadu is a full-stack approach to photonics-based quantum computer hardware, as well as its own multi-platform software, that can be easily scaled for large and complex scientific and industrial computing applications.
Medicine and Therapeutics
In the areas of medicine and therapeutics, accurate and reliable data plays a deciding role in the creation of new treatments and medications. The rigorous federal regulations regarding pharmaceuticals and medical devices result in the need for ever-more-accurate biometric data from clinical trials. At the same time, there is a growing demand for so-called “digital twins” of patients that can be used to model various potential treatments or analyze for symptom detection. It is likely that these examples are only the beginning for applications of AI that will analyze or replicate the human body.
Sample AI Medicine and Therapeutics Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s AI Fund.
Entos is a cutting-edge platform that uses AI-driven, high-throughput experimentation to rapidly develop small-molecule therapeutics.
Modicus Prime provides a self-service AI product suite that empowers scientists to perform product quality control of their drugs.
NeuraLight is building an AI-driven platform to accelerate and improve drug development and patient monitoring and introducing precision care for patients with neurological disorders.
Content Creation
Generative AI, and in particular ChatGPT, has garnered significant attention from the public. This class of AI typically takes in a user’s written prompt and creates an output in a specific format. For example: “Write a short story about a haunted elevator,” or “Create a Degas-style painting of a baseball player.” The introduction of this technology has already seen a plethora of products and services that provide everything from AI-generated headshots to completely synthesized photos of subjects that don’t exist.
Sample AI Content Creation Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s AI Fund.
Anything World offers an AI-enabled middleware platform that helps developers build interactive 3D experiences for games, images, and video production.
Korbit is an AI and natural language processing technology that can ingest static learning materials (such as e-books, tutorials, and videos) to automatically create personalized learning modules and lessons.
Web3 & Data Science
While 2023 was a turbulent year for blockchain-adjacent startups and companies, AI solutions for the Web3 space have continued to secure investments from venture capital firms. In this area, AI has the distinct advantage of being able to analyze large sets of data quickly compared to traditional algorithms. With blockchain serving as the bedrock of Web3’s services and capabilities, this ability to rapidly find patterns across the chain could become an indispensable tool for the next iteration of the internet.
Sample AI Web3 Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s AI Fund.
DataHeroes is building the first database for data science, that will help simplify and speed up all data-science related operations, from data exploration and cleaning, through labeling, training and model maintenance.
Spice creates data and AI infrastructure for Web3, providing Web3 data APIs for applications and machine learning using simple SQL queries for fast data access.
TRM Labs provides AI-powered, real-time monitoring technology intended to address compliance and identify potential fraud in the cryptocurrency industry.
Security
While the internet ushered in an unprecedented era of connectivity, it also created one of the largest points of attack used by bad actors to ransom data and infect computers with malware. In 2022 alone, 290 hospitals were affected by ransomware attacks, putting patient and personnel data at risk. Researchers and private companies alike are utilizing AI in order to prevent such attacks and securedata.
Sample AI Security Investments from AV’s Portfolio
The following are past investments AV has made, but reflect the types of promising companies we aim to include in this year’s AI Fund.
ThreatKey makes automated tools to find and eliminate malware and other cybersecurity threats, eliminating the need to hire a dedicated security team.
Pixm uses AI-based computer vision that stops phishing breaches directly on users’ devices in real time and at point-of-click, even for attacks that bypass existing security measures.
Investing in AI’s Future
As AI continues to influence and upend the status quo across the economy, Alumni Ventures will continue to invest in innovative AI-powered startups. “AI is proving itself as a transformative technology,” said Alumni Ventures CEO Mike Collins. “At this moment, artificial intelligence is the worst it’s ever going to be. It will continue to improve with each iteration, impacting just about every industry — whether they’re ready for it or not. Our investment team is identifying AI startups with the potential to reshape entire industries.”
Those considering investment into the transformative potential of startups like these should explore Alumni Ventures’ AI Fund. We offer a portfolio of ~20-30 AI and machine learning investments diversified by stage, geography, lead investor, and specific focus.
We invite you to access fund materials or connect with our team.
AI Fund 3 Open Through August 31
Our AI Fund will invest in a diversified portfolio of ~20-30 companies applying AI, machine learning, big data, and related technologies. The fund will be invested over ~12-18 months with a large reserve (~20-25%) for follow-on opportunities. AI Fund 2 was oversubscribed, and we had to establish a waitlist to accommodate interest. Click below to review fund materials or connect with a Senior Partner to learn more.
Contact [email protected] for additional information. To see additional risk factors and investment considerations, visit av-funds.com/disclosures.