"Faux ChatGPT" Startups at Risk of Failure as Generative AI Boom Cools Down

Recently it was reported that with theartificial intelligence (AI)The craze has cooled, and some of the people who had been interested in generativeAIPassionate startups face layoffs and declining user interest. For example, overseas AI startup Jasper has seen its user growth decline for four consecutive months, despite raising $125 million in funding last year at a valuation of $1.5 billion. Investors are also starting to step in cautiously, realizing that many startups are running into serious problems, and uncertainty is creeping up about whether a new crop of AI startups will survive.

According to analysts, investors remain uncertain about the business models of generative AI startups, and many have yet to demonstrate how to retain users and develop products that existing tech companies can't easily mimic. In addition, training big models requires accessing and analyzing large amounts of data that could continue to cost companies tens of millions to billions of dollars, which is already a significant burden for the vast majority of startups that have yet to turn a profit. Considering the uncertainty of the path to profitability as well as reports from Google andMicrosoft corporationsupportiveOpenAIWith stiff competition from well-funded rivals such as the likes, investors have become hesitant to fund such startups.

While the future remains fraught, several of the largest AI startups have now sought the bulk of their funding from gold masters who can provide computing power and other resources conducive to training big models. Microsoft has providedOpenAIWith more than $10 billion invested, its rival Anthropic has also received promises of hundreds of millions of dollars in investment from Google, while Microsoft and NVIDIA have also helped Inflection AI raise $1.3 billion.