Month: November 2023

Venture Capital Cross  — 11/24/2023  With the implosion of Open AI last week, investors are scrambling for alternatives.  Some funds have held back on Open AI capital contributions for secondary market transactions, according to sources.  Some have speculated that the collapse was more than an internal power struggle, that the technology was the issue.  Whatever is the case, there are hundreds of companies working on AI, Open AI is not the only one nor are they any kind of Monopoly.

Venture Capital broker-dealer Venture Capital Cross announces investment opportunities in hot AI names like Cohere, Jasper, Cerebras, Scale AI, Dataminr, and others.  In partnership with DT Unicorn Fund, Dataminr is available for accredited investors in sizes starting at $100,000 with a 0/20 SPV single layer structure.

Dataminr is an artificial intelligence company that provides AI based intelligence, alerts, and informational signals to it’s clients. The company’s private sector product, Dataminr Pulse, is used by corporations to monitor real-time events, and to aid with crisis response by providing playbooks, messaging tools and post-event documentation. Dataminr’s First Alert technology is used by first responders, such as those helping to provide aid during natural disasters and other emergency events. On the morning of January 5, 2021, Dataminr allegedly warned Capitol security officials of troubling online public chatter that would soon become the January 6 riot.

That’s definitely valuable, to some clients for sure.  Open AI’s revenue model is as yet unverified / unknown.  It may be groundbreaking, or it may be another FTX, we just don’t know.  Meanwhile, companies like Jasper AI have had their valuations cut back due to revenue decline, but they still have more revenues than Open AI and much higher revenue / valuation ratios.  So the question remains, do investors want to pickup companies like Jasper AI at discounts, or wait for the market to return and buy the high?  Until recently, it has been impossible to get AI companies at a discount to the last round.

Is this a time to buy in to the AI sector?  Some GPs think so.  VC Investment firms like Sequoia, Andreessen Horowitz, and SOMA Capital can’t get enough, according to Pitchbook.  But they have lots of capital, their economies of scale don’t necessarily apply to all investors.  Of course, there’s another way to play the AI sector – simply by Microsoft (MSFT).  Of course that’s a safer play, but you’re not going to get triple digit returns because for MSFT to double it takes a lot of news and revenue to move the needle at such a big Mega Cap.

There’s one drawback to many of these companies, however, they don’t transfer.  That means Jasper AI is forward only, and you need to be an ECP (Eligible Contract Participant) in order to buy OR sell a forward because they are derivative contracts not traded on an exchange.  The regulators look at them like swaps.

Cerebras Systems develops computing chips with the sole purpose of accelerating AI. The company is a startup backed by premier venture capitalists and the industry’s most successful technologists. (Crunchbase)

Cohere is a platform that gives developers and businesses access to NLP, powered by the innovative generation of large language models. Cohere is used to build machines that understand the world and make it safely accessible to all.  Cohere provides access to affordable, easy-to-deploy large language models. Its platform gives computers the ability to read and write. Whether to better understand what customers are saying or to write compelling copy that speaks to a target audience, Cohere can help. (Crunchbase)

Scale accelerates the development of AI applications by helping machine learning teams generate ground truth data. The company’s LiDAR, video, and image annotation APIs allow self-driving, drone, and robotics teams at companies like Lyft, OpenAI, Zoox, Pinterest, and Airbnb focus on building differentiated models vs. labeling data. (Crunchbase)

There are hundreds of other AI companies out there, and there’s space for many more.  Contrary to popular belief, AI isn’t destroying jobs, it’s creating them.  It’s also making workers more effective, so companies can pay them more.  It’s disproportionate, of course, if your job is a copy and paste type of job, AI may replace you, but it just means you should upgrade your skills and work in another department.  AI is not always automation, in most cases it’s not.  That means there will always be people who need to setup, run, control, organize, administer, support, sell, develop, train, brainstorm, deploy, the AI bots.  So don’t worry, this isn’t going to break the economy, it’s going to support it, and in parallel we’ll likely see a new disruptive paradigm of technology emerge…

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