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A.I. Boom Shines Bright Through Tech Gloom

The Betts Team
March 30, 2023

The sun is still shining in Silicon Valley—despite big tech’s turmoil, an investment frenzy over “generative artificial intelligence” has taken the Valley by storm.

A.I. is a rapidly expanding tech sector looking to bring in talent. Times like these are tumultuous, but some companies see the upside of what’s coming and are planning for expansion. And right now, generative artificial intelligence is generating MAJOR buzz and investment.

Generative artificial intelligence” describes A.I. tools that generate images, text, and sounds in response to short written prompts. OpenAI, a San Francisco artificial intelligence lab, launched ChatGPT, an A.I. chatbot that can answer questions in clear, concise language that has become the symbol of a new, powerful wave of A.I. 

In December 2022, OpenAI received widespread media coverage after launching a free preview of ChatGPT—according to the company, the preview got over a million sign ups within the first five days. People were creating everything from song lyrics to term papers to haikus. 

After more than a decade of research within companies like Google, Meta, and OpenAI, these technologies are poised to recraft everything from how graphics programs like Photoshop and InDesign, and digital assistants like Alexa and Siri work—and perhaps most significantly, online search engines like Google Search and Microsoft Bing.

And now, perhaps unsurprisingly, OpenAI is in the middle of a gold rush. The company is in talks to complete a deal that would ramp up its valuation to about $29 billion—more than double its valuation in 2021, according to a recent article in the New York Times. And Microsoft, who invested $1 billion in the company in 2019, wants to remain at the forefront of the A.I. boom and agreed at the end of January 2023 to invest $10 billion more in OpenAI.

Bill Gates shared on his GatesNotes blog that he had been meeting with the team at OpenAI since 2016 and was impressed by their work and steady progress. 

“In mid-2022, I was so excited about their work that I gave them a challenge: train an artificial intelligence to pass an Advanced Placement biology exam. Make it capable of answering questions that it hasn’t been specifically trained for. (I picked AP Bio because the test is more than a simple regurgitation of scientific facts—it asks you to think critically about biology.) If you can do that, I said, then you’ll have made a true breakthrough. I thought the challenge would keep them busy for two or three years. They finished it in just a few months.”

Bill Gates

While Gates is excited about the impact that AI will have on a wide swath of issues that the Gates Foundation is involved in, he also acknowledges that generative AI is a disruptive new technology that is bound to make people uneasy as well. 

But this deal announcement followed another announcement by Microsoft that it was laying off another 10,000 employees. Satya Nadella, the company’s Chief Executive, said the cuts would allow the company to refocus on emerging priorities like artificial intelligence, which he called “the next major wave of computing.” 

Deal-making around generative A.I. start-ups has gone into major overdrive. Jasper, a generative A.I. company founded in 2021, raised $125 million in October 2022, pushing its valuation to $1.5 billion. Stability A.I., an image-generating start-up founded in 2020, raised $101 million in October as well, catapulting its valuation to $1 billion. And smaller companies are reaping the benefits too—Replika,, and Character.AI, to name a few, have similarly been flooded with investor interest. 

In 2022, tech investors poured at least $1.37 billion into generative A.I. companies across 78 deals, almost as much as they invested in the five years prior combined, according to PitchBook—and 2023 has already nearly topped that number ten-fold, with Microsoft’s $10 billion investment in OpenAI. Investors at Sequoia Capital shared with the New York Times “that generative A.I. had the potential to generate trillions of dollars of economic value.” And Lonne Jaffe, an investor at Insight Partners, said, “There is definitely an element to this that feels like the early launch of the internet.”

Upwards of 450 start-ups are now working on generative A.I., according to NFX, a venture firm exclusively focused on pre-seed & seed-stage start-ups. And the feeding frenzy has been amped up by investor eagerness to find the next BIG thing in a dismal tech environment. We are seeing a changing of the tech guard. As one wave ends, another begins. With so many companies getting major funding, hiring is ramping up again. 

Many of those hit by the recent spate of layoffs may find themselves part of the A.I. revolution. About 15% of Crunchbase’s list of more than 500 Actively Hiring start-ups are in the A.I. sector, including funded companies hiring for multiple roles currently who did not conduct layoffs in the past year.

With the A.I. market set to increase by $76.44 billion by 2025—and an accelerated growth rate of more than 21%—we are on the precipice of the next gigantic thing.

Are you ready? Betts has extensive candidates with deep experience selling A.I. software, if you are looking to hire this type of talent, contact us here