Amid all the hype for generative artificial intelligence, some venture capitalists have refused to join the fray. These young companies need so much capital and so much computing resources, the VC skeptics say, that they’ll have little chance of competing against Google, Amazon and other big tech companies that may soon have similar products.
Our recent reporting this week was a reminder of how the internet giants are staking out territory as investors in generative AI as well. While their interest isn’t bad for investors that back the AI startups early, it makes things difficult for the late-stage firms pursuing the same rounds. Answer me this: Why would an AI startup choose a venture firm, which can offer only capital, over Google, Microsoft, AWS, Oracle or Nvidia? These companies, of course, can also write huge checks—plus provide resources like cloud credits and graphics processing units.
“If you want the donuts, you go to the baker,” as one venture capitalist put it this week.