59 – The case for not starting yet a new AI platform… and not investing in one

Do we need yet another new AI platform? Would new foundation models stand a chance in today’s market? Will OpenAI, Anthropic, etc be the new Tech winners … or will they just get acquired, at some point?

Navigation:

1. Intro (01:34)
2. Landscape
3. Recent gigantic acqui-hires
4. The Big Players
5. How will the hardware change?
6. Will there be a next wave beyond GPT?
7. Is it too late to come in and disrupt the big players?
8. Conclusion

Our co-hosts:

• Bertrand Schmitt, Entrepreneur in Residence at Red River West, co-founder of App Annie / Data.ai, business angel, advisor to startups and VC funds, @bschmitt
• Nuno Goncalves Pedro, Investor, Managing Partner, Founder at Chamaeleon, @ngpedro

Our show: Tech DECIPHERED brings you the Entrepreneur and Investor views on Big Tech, VC and Start-up news, opinion pieces and research. We decipher their meaning, and add inside knowledge and context. Being nerds, we also discuss the latest gadgets and pop culture news

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Bertrand

Welcome to Tech Deciphered episode 59. Again, this will be an episode on AI. This time we make the case for not starting yet a new AI platform and not investing in one either. What’s happening in AI? I guess all of you have heard about all the massive investment made by some of the leading players, OpenAI, Microsoft, Google, Meta, XAI, Oracle, as well as even some smaller startups from Anthropic to Mistral.

Bertrand

Of course, Amazon has built its own frontier model as well as is providing infrastructure to a lot of players. But isn’t there already too much capital going into AI platforms and isn’t it going too fast?

Nuno

Well, we think probably yes. That’s going to be the thesis of our discussion today. Some of the startups you mentioned, by the way, they’ve raised a ton of money. I mean, Anthropic is well above 8 billion. Mistral is at a couple of billions as well, right, at this stage?

Bertrand

I think we are closer to a billion.

Nuno

It’s around a billion. Yeah, around a billion, several billion for Anthropic. Then there’s a couple of companies we will talk about later that raised a few billion that are no longer independent. It feels like too much. It feels like there’s a gold rush of sorts. It is probably a good analogy. A lot of investors putting capital into it.

Nuno

But at the same time, it’s being matched by the big players, Microsoft, Google, Meta by pushing LLM, XAI, OpenAI, we could argue, is it a big player already or not? But they just raised a ton of money as well. At 150 billion valuation, right? I mean, it’s like…

Bertrand

Yes, 150 billion valuation.

Nuno

It’s like, okay. They’ve already said, well, we are going to continue raising money. We’re going to continue spending a lot of money as well. It feels like a gold rush. It feels like there’s too much capital deployed into it. Something’s got to give, someone’s going to fail. Maybe that’s a good segue to the fact that we already start seeing some moments that are quite interesting.

Bertrand

Maybe to OpenAI, to jump back, to be fair, they’ve reached more than 3 billion of annualized revenues, and that was based on numbers from June. This is very high valuation for sure. But it’s also coming with one of the fastest growing business ever in terms of revenues.

Nuno

Yes. We will see if it’s sustainable, the business that they’re building, because there’s no competition. People are using other services out there in tandem. I s