- Investments in AI are not slowing down, despite skepticism and real-world dangers
- AI is expected to be an integral part of most industries
- Tech giants go nuclear to manage electricity demand
Despite the broad potential applications of AI technology, concerns remain about its reliability, the legality of training models with copyrighted data without permission, and the environmental impact.
Given this, many investors believe that generative AI will become an integral part of industries such as business analytics, creative services and automation.
Analysts predict that 60% of current skeptics will embrace generative AI in the coming years, consciously or not, and investors aren't slowing down as they continue to throw their hat in the ring.
The rapid expansion of generative AI
New figures from PitchBook claim that investment in generative AI startups remains strong, with venture capitalists investing $3.9 billion in 206 deals in the third quarter of 2024. US-based companies attracted the most , raising $2.9 billion across 127 deals and this does not include OpenAI's notable $6.6 billion round.
Some notable funding rounds include Magic, a coding assistant startup that raised $320 million in August, and Glean, an enterprise search company, which raised $260 million in September.
Meanwhile, Hebbia, a business analytics firm, made $130 million in July. Additionally, investments extended beyond the US: China's Moonshot AI raised $300 million and Japan's Sakana AI closed a $214 million round focused on scientific discoveries.
Unfortunately, the rapid expansion of generative AI also poses challenges, particularly when it comes to power consumption. According to Bain & Company, companies deploying AI at scale will need gigawatt-scale data centers, which consume up to 20 times the energy of today's typical data centers. This demand risks putting pressure on global electricity and labor markets.
Reliance on data centers has already prolonged the use of coal-fired power plants, and Morgan Stanley warned that greenhouse gas emissions could triple by 2030 if the trend continues unchecked.
In response, major data center operators such as Microsoft, Amazon and Google are turning to nuclear power to offset their environmental impact. Microsoft, for example, announced plans to draw power from the controversial Three Mile Island nuclear facility, although such projects could take years to come online.
Despite these environmental and technical hurdles, investor interest in generative AI remains high. ElevenLabs, known for its viral voice cloning tool, is reportedly looking to raise funds at a valuation of $3 billion. Black Forest Labs, the company behind a controversial imager on the X platform, is also in talks for a $100 million funding round.
Through TechCrunch
