AI hype in venture - pitfalls

Last month, Microsoft confirmed it had agreed to a multi-year, multi-billion dollar investment ($10billion) at OpenAI, the startup behindartificial intelligence tools ChatGPT and DALL-E. Next, ChatGPT competitor Anthropic raised a $300 million round from Google. And last week, Cohere, another OpenAI competitor, held talks with investors to raise hundreds of millions of dollars in a new round. Companies such as Asimov and Metagenomi, which use AI in biotechnology, and DeepL, an AI-based language translator, recently raised $100 million each.
These are big numbers, especially in a market that has slowed markedly over the past 12 months. The AI ​​craze shows no signs of slowing down yet, but…

We've been through this before

Exactly at the same time last yearwhen the market showed signs of an imminent fall, Web3 startups and cryptocurrencies experienced their glory hours. In the first quarter of 2022, crypto startups raised 29 rounds of $100+ million each. Then there was the hype around big data and machine learning. More recently, we have seen large venture projects in areas such as HR and logistics. It all attracted the attention and a lot of money from venture capitalists, only to quickly burn out shortly thereafter. This happens all the time in the venture business - a few big rounds lead to even bigger rounds, and all of a sudden, investors just can't stop writing checks until the hype subsides.

❔The right strategy

Maybe things will be different with AI hype, buthistory says otherwise. Therefore, you do not need to run into a train rushing at full speed - trends need to be anticipated before they are in all the headlines. Trades should be entered when the relevant market is still cool.

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