A New Area of A.I. Booms, Even Amid the Tech Gloom

In the ensuing excitement, Eugenia Kuyda, founder and chief executive of chat bot start-up Replika, said in an interview that she was contacted by “every V.C. firm in Silicon Valley,” or more than 30 firms. She took their calls but decided against additional funding because her company, founded in 2014, is profitable.

“I feel like the person who was a week early arriving at the airport for a flight — and now the flight is boarding,” she said.

Character.AI, another chat bot company, and You.com, which is adding chat technology to its internet search engine, have also been deluged with interest from venture capitalists, the companies said.

Sharif Shameem, an entrepreneur who built a searchable database for images created by Stable Diffusion in August called Lexica, said his tool rapidly hit one million users — a sign he should shift from his existing start-up to focusing on Lexica. Within a few weeks, he raised $5 million in funding for the project.

Mr. Shameem compared the moment around generative A.I. to the advent of the iPhone and mobile apps. “It feels like one of those rare opportunities,” he said.

Mr. Jaffe of Insight Partners said his firm has since encouraged most of its portfolio companies to consider incorporating generative A.I. technology into their offerings. “It’s hard to think of a company that couldn’t use it in some way,” he said.

Radical Ventures, a venture firm in Toronto, one of the global centers of A.I. research, was created five years ago specifically to invest in this kind of technology. It recently launched a new $550 million fund dedicated to A.I., with more than half of its investments in generative A.I. companies. Now those bets look even better.

Article source: https://www.nytimes.com/2023/01/07/technology/generative-ai-chatgpt-investments.html