AI Competition Is Robust
As the FTC voices “concerns” about competition in the AI space, it’s important to remember that generative AI shows how competitive and dynamic the tech sector is. Since the introduction of ChatGPT earlier this year, the tech space has undergone yet another evolution. With so much potential in new areas of AI technology, companies of all sizes are exploring the enormous potential these technologies bring. Meanwhile, startups are popping up all over the world to meet the growing demand for AI services, indicating low barriers to entry.
Here’s what you need to know about competition in the AI space:
AI Startups Are Thriving
According to Axios, more than a third of this year’s hottest tech startups are AI focused. “More than a third of the hottest enterprise tech startups focus on generative AI, and even more than that are incorporating the technology as a service or feature, according to the latest Enterprise Tech 30 list, compiled by venture capital firm Wing and shared first with Axios, Ina Fried reports.”
— This is a major jump from the share of AI companies just two years prior. “Just 3% of companies in 2021 were AI models and tools companies, for example, while SaaS startups accounted for 43% of companies on the ET30 list as recently as 2019.”
— “Two-thirds of companies are new to this year’s list, with five — Dust.tt, LangChain, Magic, MotherDuck, and Omni Analytics — founded in the last 18 months.”
More than 150 chatbot apps have been published to app stores in Q1 2023 alone, says Adam Blacker in a piece for Apptopia. “Apps being published to the app stores with the term ‘AI Chatbot’ or ‘AI Chat’ in either their app name, subtitle, or description have increased 1480%, year-over-year, in the first quarter. Just this year (through March), 158 have been published to the app stores. The public launch of OpenAI’s ChatGPT product has created a consumer-facing artificial intelligence gold rush, including in the realm of mobile apps.”
“Around 2,000 start-ups” now include AI “as a core part of their business model,” notes UBS. “Around 2,000 start-ups globally now have AI as a core part of their business model. And with headline-grabbing news, like Google’s AlphaGo defeating the Go world champion or Baidu’s personal assistant Duer accepting orders at KFC restaurants in China, the foundation has been set for progress to avalanche in the years to come.”
AI Technologies Are Available To Companies Small And Large, With Free Open Source Models And Falling Computing Costs
Free AI models are gaining steam, with some predicting most software developers will eventually opt to use those models over proprietary ones, explains a piece in The Information. “Free AI models are now ‘reasonably close’ in performance to proprietary models from Google and ChatGPT creator OpenAI, and most software developers will eventually opt to use the free ones, said Ion Stoica, a professor of computer science at University of California, Berkeley[.]”
Open source models can compete with large models and can be fine-tuned to impressive degrees on a small budget, explains Ben Dickson for TechTalks. “These open-source alternatives to ChatGPT prove a few key points. First, LLMs with a few billion parameters can compete with very large models in terms of performance if you train them on very large datasets. Second, you can fine-tune small LLMs to impressive degrees with a very small budget and a modest amount of data. And finally—and this is not a new point—the pace of advances in open-source LLMs is much faster than in the closed ecosystem because different teams can build on top of each other’s work.”
— Dickson continues to say that certain techniques can reduce the cost of training models by “up to a thousand times.” These models also take advantage of techniques such as low-rank adaptation (LoRA), which reduces the cost of training by up to a thousand times. These models provide alternatives to businesses that want to use LLMs in their applications. Now, they have access to low-cost models that can run on their own servers and can be updated with their own data frequently with a very small budget.
As open source models expand, the price of training AI models has already declined and will continue to decline in the future, according to Ark. “Ark is expecting AI will drive a full-on growth explosion by the end of the current decade. The firm believes the cost to train generative AI models to GPT-3 capability will decline by 70% per year between now and then, meaning a business could deploy a sophisticated large-language model for just $30 in 2030. That would be down from $4.6 million in 2020!”
Investors Are Betting Big On AI Startups
Anthropic has had the largest AI funding round this year since Microsoft’s Open AI investment in Q1, explains a CNBC piece. “Anthropic, an artificial intelligence startup founded in 2021 by former OpenAI research execs, is taking full advantage of the market hype. The company on Tuesday said it raised $450 million, which marks the largest AI funding round this year since Microsoft’s investment in OpenAI in January, according to PitchBook data.”
— “Anthropic is the company behind Claude, a rival chatbot to OpenAI’s ChatGPT.”
Investors are “writing bigger checks to fast-track” AI growth, notes a recent Wall Street Journal article. “Corporate venture-capital investors are writing bigger checks to fast-track the growth of artificial-intelligence startups, prompted by demand from businesses for ChatGPT-like generative AI tools, investors and analysts said.”
AI Is Everywhere—Businesses Are Racing To Compete By Integrating AI Into Their Operations And Offerings
Social media platform Snapchat is betting AI will become an everyday tool, reports the Verge. “Snapchat is introducing a chatbot powered by the latest version of OpenAI’s ChatGPT. According to Snap CEO Evan Spiegel, it’s a bet that AI chatbots will increasingly become a part of everyday life for more people.”
Salesforce is integrating generative AI to simplify data analytics. “Salesforce introduced the next generation of Tableau, powered by Einstein generative AI technology. With Tableau GPT and Tableau Pulse, analysts and business users can automate data analysis, anticipate user needs and automatically generate actionable insights.”
— The company predicts the AI revolution will “transform” the way we do work. “The generative AI revolution will transform how work gets done, making it exponentially easier for everyone to tap into immense troves of trusted data to do their jobs more efficiently. Nearly 80% of senior IT leaders believe generative AI will help their organization make better use of data — which business leaders agree is critical for decision-making.”
Startups like Clay are also integrating AI to help users derive insights more easily, notes Techcrunch. “Clay, a startup that’s something of a personal CRM, as it’s designed to help people manage their own relationships — including those with friends, family, colleagues, industry peers and more — is now turning to AI to help you derive more insights from your network of contacts. If you ever wanted to ask an AI who among your connections has ever been to a specific place, works at a particular company or is knowledgeable about a particular topic, Clay’s new AI navigator, which it’s dubbed Nexus, could help.”
AI Is Already Playing A Critical Role In The U.S. Tech Rivalry With China
AI is the latest battleground in America’s rivalry with China, explains Rishi Iyengar in a Foreign Policy piece. “The United States is no stranger to technological arms races, having spent much of the Cold War in a two-pronged one-upmanship effort against the Soviet Union to build bigger rockets and land those on the moon. Its rivalry now is with China, and the latest battleground is artificial intelligence. China has long sought to dominate the AI landscape, laying out a plan to become a ‘global leader’ in the sector by 2030 and pledging billions of state dollars for research and development.”
China is already a “major leader in artificial intelligence,” explains Paul Scharre, Center for a New American Security’s vice president and director of studies. “China is a major leader in artificial intelligence, and they’ve been investing heavily in improving the Chinese AI research community. The reason why I think it’s been a shock to Washington is that people in D.C. have sort of taken U.S. technology leadership for granted.”
— Scharre continues: “I think we’re seeing Washington belatedly pivot to this technology competition with China. But China’s a serious technology competitor.”
According to the annual State of AI Report, Chinese institutions have produced 4.5 times more AI research papers than American institutions since 2010.
Venture capitalist Vinod Khosla explains, China has an advantage because it “can take many more risks, make many more errors.”
Innovation in AI is taking place before our very own eyes. The costs for inputs are decreasing and competition in AI continues to grow.