With ChatGPT becoming a household name, the generative AI market is anticipated to experience tremendous growth over the next few years on a global scale. According to a recent report, the market for generative AI is expected to grow from $11.3 billion in 2023 to $51.8 billion in 2028 at a CAGR of 35.6%.
Leading international firms in the field, including Jasper, Runway, Lightricks, and Stability AI, have garnered more than $500 million in funding to date, demonstrating the potential. We are seeing a proliferation of new firms working on creative solutions utilising generative AI in India as well. A larger use is anticipated across industries, including content, retail, healthcare, and finance, according to experts. Investors are so keenly monitoring the market, and it is predicted that a significant amount of capital will flow into it over the next few years.
For a very long time, investments have been increasing in the field of AI. India ranks fifth in terms of investments received by businesses providing AI-based goods and services in 2017, according to Stanford University’s annual AI Index report. Startups focused on generative AI may soon experience an increase in capital inflow thanks to the ChatGPT revolution.
Here are 10 important points to keep in mind while investing in the sector, in honour of National Technology Day 2023.
Raj Neervannan, co-founder and CTO of Alphasense, Kavit Sutariya, general partner of CapFort Ventures, Sunil Shekhawat, CEO of Sanchiconnect, and Bhargavi V, partner of Java Capital, have all contributed to this discussion.
- Look for definite use cases where the startup’s technology can have an impact. Startups need to be very explicit about the exact issues they hope to resolve.
- Ask the startup if it has the technical know-how to create and apply generative AI solutions. They should be selecting the best people and collaborators because this is an area that is continually expanding and necessitates specialised abilities.
- Think about the startup’s generative artificial intelligence technology’s ethical and legal ramifications, as well as potential future regulation.
- Examine the generative AI market’s competitive environment and how the startup’s technology stacks up against that of other market players. Who are the company’s rivals? What are their advantages and disadvantages? How does the business set itself apart from its rivals?
- Verify whether the company places a high priority on innovation, research and development, and the creation of fresh generative AI methods.
- Concentrate on the core technology and how it is used in the startup’s offering.
- Given that many companies are making their technology open source, take into account the risk of technological obsolescence and commoditization.
- Analyse the size of the market for the company’s goods or services. Does the target market have a substantial need for generative AI? What possibility for expansion does the future hold?
- Examine the company’s revenue sources and business model. Is the business making money off of its goods or services? Is the revenue model long-term resilient?
- In addition to the aforementioned factors, the finance and regulatory environments should also be taken into account when investing in generative AI-related businesses.
