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Billions of dollars in venture capital money has flooded the AI space over the last year, as firms large and small demand new generative AI services. AI startups raised $12.3 billion between Jan. 1 and Jul. 16, according to TechCrunch<\/em><\/a> <\/em>citing data from Crunchbase.\u00a0<\/p>\n But the hype isn\u2019t so good for investors, who now need to sort out the good from the bad, and the potentially useful from the completely useless.<\/p>\n \u201cIt\u2019s a pretty tough time to be an investor,\u201d said Justin Nguyen, general partner at Monk\u2019s Hill Ventures at the Fortune Brainstorm AI Singapore<\/a> conference on Wednesday. \u201cIt\u2019s very difficult to see what\u2019s the thin layer on top of what IBM is doing, Google is doing, AWS is doing, a thin layer on something that\u2019s pretty commoditized, on these large language models\u2013and what\u2019s truly valuable.\u201d<\/p>\n At the end of the day, value will come from the data generated from people using AI applications and how it\u2019s used.<\/p>\n \u201cWhen anyone can prompt, then what\u2019s proprietary to you?\u201d Nguyen asked. \u201cAnd how do you go about collecting, amassing, and getting results from that data? A lot of the investing we see are just thin layers on top.\u201d<\/p>\n Ren Yeong Sng, managing director of artificial intelligence strategy and solutions at Temasek, agreed that it wasn\u2019t an \u201ceasy time for investors.\u201d<\/p>\n Yet Sng was less focused on data as a source of value. Instead, he suggested that investors value a startup\u2019s ability to continually engage customers. Continued engagement means more data is collected, which in turns builds more value for an AI application. (AI models need large data sets to continuously learn and improve)<\/p>\n \u201cYou need the channel to engage the consumers in order to generate new data that\u2019s fresh in the moat that you want to accrue,\u201d Sng said.<\/p>\n But even if investors find it tough to figure out where to invest in AI, they\u2019re using AI to figure out where to invest. \u201cWe ourselves use it to help us identify companies that are interesting,\u201d said Chan Yip Pang, executive director at Vertex Ventures, noting that the VC\u2019s AI is already helping the fund find companies it would have missed in the past. He explained AI can help with sourcing information <\/strong>and picking the right investment target.<\/p>\n And the AI space is likely to expand, as startups emerge to fill a corporate demand for the new technology.<\/p>\n \u201cSixty percent of CEOs are getting pressure from their investors to do something about AI,\u201d Juhi McClelland, general manager and managing partner for APAC at IBM Consulting, said. \u201cWhen CEOs get pressure, when 60% to 65% of them are being forced to do something, they want to react.\u201d<\/p>\n<\/div>\n CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n<\/div>\n\nValue and data<\/h2>\n
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