The News: Consider the following announcements over the past four weeks:
May 23: LLM Anthropic raises $450 million Series C, investors include Google, Salesforce, Zoom
June 8: LLM Cohere raises $270 million Series C, investors include NVIDIA, Oracle, Salesforce
June 13: Hugging Face and AMD partner on accelerating state-of-the-art models for CPU and GPU platforms
June 13: Accenture announces $3 billion investment in AI, launch new incubation lab for advanced AI
June 22: AWS launches $100M program to fund generative AI initiatives
That’s more than $3.8 billion in generative AI investments within a short period.
All of these announcements have one driver in common: they are aimed at placing the investors in these projects in a favorable position to gain traction with generative AI.
Facing the Unknowns of Generative AI, Key Industry Players Collaborate, Incubate, and Back Startups
Analyst Take:
At a dizzying pace, a key group of AI innovators are making a range of generative AI investments – collaborating with generative AI experts, creating incubators for generative AI innovation, and investing liberally in Generative AI startups. What is the genesis of this strategy? What is the aim? Who are the winners and losers? Here’s our take:
Gen AI Venture Capital Is Not Just for Investment Firms
Leading tech firms have had investment arms for many years, but it seems like when it comes to generative AI, traditional VCs are taking a bit of a back seat. Microsoft’s $10 billion investment in Open AI is prime evidence of this trend, but there are plenty of other recent examples (Google, Salesforce, Zoom in Anthropic; NVIDIA, Oracle, Salesforce in Cohere). The drivers seem to be pragmatic – strategic investments allow AI innovators first-hand access to cutting edge generative AI intellectual property. Joining as a venture investor, AI innovators can likely mitigate the price of acquisition should they choose to acquire a startup in whole.
Partnering with Gen AI Experts Is Shrewd
Startups’ advantages over established enterprises are agility and focus. So, when you are an established enterprise, it makes sense that you might want to partner with focused, agile players. The generative AI market is moving so fast, this strategy makes even more sense. The best example so far? AMD and Hugging Face partner to build competitive market for AI compute/GPUs/CPUs. Hugging Face could be unofficially crowned “the startup of choice” to partner with in the generative AI market. In addition to AMD, Hugging Face is working with AWS, Intel, and MongoDB. HPE has announced that large language model (LLM) provider Aleph Alpha has adopted the HPE Machine Learning Development System to train their system known as Luminous.
Incubators Enable a Finger on the Pulse of the Good and the Bad
Part of Accenture’s $3 billion investment in AI is creating the new Accenture Center for Advanced AI, where Accenture customers will collaborate with Accenture AI teams to experiment with AI technology, but more importantly, with AI use cases. AWS will spend $100 million for the very same reasons. These are prime examples of AI innovators seeking to bring that innovation as close to themselves as possible, for purposes of learning and informing their own AI approaches. We are in a massively disruptive time with generative AI, and this investment is a way to remain keenly aware of good and bad ideas.
Who Wins?
In the examples given for this research note, it is clear that the investors will win, and it is one of the reasons Futurum Group considers them to be AI innovators. The list includes Microsoft, Accenture, AMD, AWS, Google, Salesforce, Zoom, Oracle, and NVIDIA. Look for other key enterprises to follow suit with some of these market strategies.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Based in Tampa, Florida, Mark is a veteran market research analyst with 25 years of experience interpreting technology business and holds a Bachelor of Science from the University of Florida.
