Funding vs Revenue in AI landscape: It's all topsy turvy

Will the trend reverse? ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more [Funding vs Revenue in AI landscape: It's all topsy turvy]( Will the trend reverse? Jul 18   [READ IN APP](   [Upgrade to paid]( As of now, all the competition is in application layer - and it seems all the big money is going in foundational layer (pic courtesy [GTM Strategist](. Sounds crazy, right? After all, if you look at combined fund raised by OpenAI ($14Bn) Anthropic ($7.3Bn) and the revenue scale (OpenAI revenue is ~$3.4Bn / Anthropic is expected to hit ~$850mn by end of 2024 while Perplexity was at $20mn last year) - it is clear that right now, there is a LOTTT of money going in and out of the foundational layer. And application layer (in fact, mostly subscription businesses) is where all the startup action is - but with very little money and revenue. Ahh…the typical startup world, right? Sounds like a losing deal? I don’t think so. Ashish Sinha: On startups, AI and Platforms [AI's $600Bn hole..but look who is making money in the AI boom]( Gen AI is resulting in $600Bn capex hole globally. Here is a simple calculation by David Cahn of Sequoia Capital. All you have to do is to take Nvidia’s run-rate revenue forecast and multiply it by 2x to reflect the total cost of AI data centers (GPUs are half of the total cost of ownership—the other half includes energy, buildings, backup generators, etc… [Read more]( 21 days ago · 3 likes · Ashish/NextBigWhat 3 years from now. I’d like to believe that the trend will reverse as foundational / computing layers will get commoditized (it already is) and what’ll matter is the operational and application layer. With open source models catching up, expect commercial foundational models to start solving for vertical use-cases (OpenAI is already going deep in [healthcare with ThriveAI]( and will eventually launch more application layer businesses. [Share]( And at the application layer, one of the big drivers will be understanding customer’s JTBD (jobs to be done). The teams that have their ear to the ground and agile operations will continue to beat the ones stacked with funding and PR announcements. And yeah, the biggest challenge is that [CIOs are still not confused about putting AI to production.]( The AI winter will start soon. Who do you think will win in the long run? You're currently a free subscriber to [Ashish Sinha: On startups, AI and Platforms](. For the full experience, [upgrade your subscription.]( [Upgrade to paid](   [Like]( [Comment]( [Restack](   © 2024 Zakti Techmedia Private Limited 677, 27th main, HSR Layout, Bangalore-560102 [Unsubscribe]() [Get the app]( writing]()