Friday, April 12, 2024
Startups

It’s not just hype, corporate America is making huge bets on AI transforming their businesses

Hype or not, the potential of AI has tech companies enamored, and businesses large and small have begun betting heavily on efforts that leverage AI in some fashion to spur their growth to new heights.

These wagers have come in many forms. Firms like PwC and Accenture have promised to spend heavily on the sector, while others are creating new AI-focused capital pools and directly investing in AI-focused startups. A large number of tech companies today are also tapping their operating cash flow to add AI to their existing products and services.

There’s an all-out race to leverage AI to add more utility and value to products, and to reap a portion of the resulting demand in AI-powered products and services.

It appears this sector is resilient to the broader macroeconomic headwinds that have been affecting deal-making and fundraising in the tech world. If trends in deal-making continue, this year could go on to see the third-highest number of deals completed by AI startups in the expansion stage, according to Deloitte’s latest Road to Next report.

Investors are paying attention, too, and nearly every tech company’s quarterly results conference call has been full of analysts asking how the company in question will find growth or operating leverage with AI-related tooling.

TechCrunch wrote earlier this year that a tech company’s AI posture was among the most important measures of their present worth. That has only become more true since.

This afternoon, we’re sorting through major promises, investments and some product news to underscore how broad the AI push has been in the larger enterprise software space.

Is the current AI boom a startup story? Yes. It is a Big Tech story? Yes. Are we seeing an entirely new generation of software being built and sold? Yes. Let’s get our heads around just how broad the AI moment truly is.

Big checks, big bets

Today, it seems nearly pedestrian that Microsoft in 2019 put $1 billion into OpenAI for licensing its tech and built a custom supercomputer in the Azure cloud. The figure was later dwarfed by $10 billion arrangement between the companies, but Redmond did help set the tone for how much capital was going to flow — and perhaps how much the sector would need — into AI-related work.

It’s not just hype, corporate America is making huge bets on AI transforming their businesses by Kyle Wiggers originally published on TechCrunch

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