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AI startups raised $6.9B in Q1 2020

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Re: AI startups raised $6.9B in Q1 2020

#21

Post by rjdagost »

axegon_ wrote: post #18
rjdagost wrote: post #12

Earlier quoted context omitted.

Your suspicion is largely correct, in my experience. I've worked as a consultant on a number of different AI / ML projects for start-ups. Most aren't doing anything all that new or groundbreaking from an ML point of view. Their real innovation is usually more about applying ML to industries / areas where it hasn't been used much before. But that doesn't get the investor dollars flowing in, so the founders try to make…

> And in recent times, it has worked. This is what __REALLY__ bugs me. Personally I'd love to see money poured into actual R&D rather than people abusing the "ML" and "AI" acronyms. Investors don't care about your R&D at all and commonly see it as a huge risk factor. Which it is of course. A semi-working prototype has a much better chance of succeeding so they stick to that. But as a consequence many people(myself in…

I share your frustration. If you're trying to be realistic and straight-forward about the limitations of AI/ML, you're getting little interest from investors. Here's an anecdote. I was at an "AI in drug discovery" conference 2 years ago. One of the presenters, the founder of a drug discovery start-up, emphatically made the claim in a talk that "we should deliberately overhype AI in drug discovery, to raise awareness of what we as an industry can accomplish". I was gobsmacked by this. And yet, in the social mixer afterwards, the investors I spoke with LIKED this approach- they said the boastful founder was bold and visionary, and they didn't care that he was exaggerating the capabilities of his company. So, that's why all we hear is hype- founders are just responding to investor incentives.

That's also why I work as a freelance consultant and not as a founder. I think that autonomous driving (rather, the lack of such) is going to be what triggers the next AI winter. Too much money and hype, too little results for too long- the rope is wearing quite thin from what I can see.

Re: AI startups raised $6.9B in Q1 2020

#22

Post by misiti3780 »

boltzmannbrain wrote: post #5

1. Many startups claiming AI are simply doing things with data; research shows two-fifths have no AI programs in their products [1]. 2. Round-closing announcements trail the actual closing by several months. Not to mention the actual raising and diligence takes months (even more so for larger/later rounds). Thus the $ reported here does not factor in covid19 and the current economic crisis, as implied. [1] https://ww…

as far as i can tell the most egregious industry is the insurance (specifically property related). every single company claims to be doing AI and it's all complete bullshit. the term has no meaning anymore.

Re: AI startups raised $6.9B in Q1 2020

#23

Post by w1 »

rjdagost wrote: post #12
axegon_ wrote: post #7

Earlier quoted context omitted.

I've spent an unhealthy amount of time at presentations, conferences, seminars and meetups. With that, on your first point, I'm more inclined to believe somewhere around 90% have absolutely no "AI" or "ML" for that matter in their products. And a large fraction of those who do have re-used existing open source solutions without digging a lot into them. De omnibus dubitandum est, of course, but this is the impression…

Your suspicion is largely correct, in my experience. I've worked as a consultant on a number of different AI / ML projects for start-ups. Most aren't doing anything all that new or groundbreaking from an ML point of view. Their real innovation is usually more about applying ML to industries / areas where it hasn't been used much before. But that doesn't get the investor dollars flowing in, so the founders try to make…

I've been working in this space for a few years, as an engineer and now founder, and I think a lot of savvy investors are beyond this.

In my experience, everyone who is informed acknowledges that ML is very powerful, but the algorithms are widely accessible.

Instead, it seems that investors are looking for a company that protects itself with a proprietary source of data that allows for results that are unobtainable by competitors. Also, to a lesser extent, domain expertise that allows them to tailor existing ML architectures specifically for the problem at hand.

Re: AI startups raised $6.9B in Q1 2020

#24

Post by xiaolingxiao »

The key bit of information from this (https://venturebeat.com/2020/04/14/ai-startups-raised-6-9-bi...) is that "capital flows disproportionally into large late-state deals." I would read this as a lagging indicator of how "hot" the field is. Most of the companies have found their "niche" and identified the actual problems that need to be solved; like other commentators have said, these problems may only be tangentially related to ML models themselves. These companies are currently scaling up and locking themselves into the market. Given how long the sales cycle is and how sticky it may be in enterprise, this means now is not a great time to start a company just doing "AI".

Re: AI startups raised $6.9B in Q1 2020

#25

Post by axegon_ »

rjdagost wrote: post #21
axegon_ wrote: post #18

Earlier quoted context omitted.

> And in recent times, it has worked. This is what __REALLY__ bugs me. Personally I'd love to see money poured into actual R&D rather than people abusing the "ML" and "AI" acronyms. Investors don't care about your R&D at all and commonly see it as a huge risk factor. Which it is of course. A semi-working prototype has a much better chance of succeeding so they stick to that. But as a consequence many people(myself in…

I share your frustration. If you're trying to be realistic and straight-forward about the limitations of AI/ML, you're getting little interest from investors. Here's an anecdote. I was at an "AI in drug discovery" conference 2 years ago. One of the presenters, the founder of a drug discovery start-up, emphatically made the claim in a talk that "we should deliberately overhype AI in drug discovery, to raise awareness…

I think the autonomous driving, while a factor, will not be as much of a kick as covid-19 cure and/or vaccine. I mean all the best to everyone trying and I hope someone proves me wrong about this by actually discovering a drug/vaccine through AI. But as far as autonomous driving is concerned, at least there are some visible results. Not as advertised and(to my mind at least) but most importantly not that valuable but at least there's SOMETHING on the table....

Re: AI startups raised $6.9B in Q1 2020

#26

Post by threwawasy1228 »

rjdagost wrote: post #12
axegon_ wrote: post #7

Earlier quoted context omitted.

I've spent an unhealthy amount of time at presentations, conferences, seminars and meetups. With that, on your first point, I'm more inclined to believe somewhere around 90% have absolutely no "AI" or "ML" for that matter in their products. And a large fraction of those who do have re-used existing open source solutions without digging a lot into them. De omnibus dubitandum est, of course, but this is the impression…

Your suspicion is largely correct, in my experience. I've worked as a consultant on a number of different AI / ML projects for start-ups. Most aren't doing anything all that new or groundbreaking from an ML point of view. Their real innovation is usually more about applying ML to industries / areas where it hasn't been used much before. But that doesn't get the investor dollars flowing in, so the founders try to make…

Yep, just grab any random ML paper off the top of arxiv and have your product development team replicate it. Even if it doesn't end up working properly at all and you have to shelve it for a more common solution, you can still claim the 'revolutionary' technique is in R&D at your company. Most investors can't tell the difference.

Re: AI startups raised $6.9B in Q1 2020

#27

Post by myth_drannon »

boltzmannbrain wrote: post #5

1. Many startups claiming AI are simply doing things with data; research shows two-fifths have no AI programs in their products [1]. 2. Round-closing announcements trail the actual closing by several months. Not to mention the actual raising and diligence takes months (even more so for larger/later rounds). Thus the $ reported here does not factor in covid19 and the current economic crisis, as implied. [1] https://ww…

Yup. I once worked for a startup that claimed to be doing DeepLearning, AI and other hyped stuff. The "machine learning" guy, once he allowed us to look at his code (took two years to convince him to do that), was basically doing point and click with Matlab dialog wizards. It was some horribly contrived linear regression that took about a month(!) to train on a couple of millions of data points. But he had a PhD (non-CS) and he could bullshit the clients and management for hours... When he talked about ML models he called it "AIs" like: "So we have a couple of AIs in production that generate predictions based on blah, blah..."

Re: AI startups raised $6.9B in Q1 2020

#29

Post by developerdylan »

kavalg wrote: post #17
tkyjonathan wrote: post #16

Almost none of the company leaders or even VCs fully understand what AI even is or does. They just like to hear thats its there. If you don't have some AI in your company, you won't get investors.

Is it really that bad? I thought investors care more about business model and growth potential.

It isn't THAT bad. Investors definitely care more about model and growth potential. But you will certainly run into those who ask "How are you integrating AI into your platform?" without any real idea about what that means.

Re: AI startups raised $6.9B in Q1 2020

#30

Post by rmrfstar »

myth_drannon wrote: post #27
boltzmannbrain wrote: post #5

1. Many startups claiming AI are simply doing things with data; research shows two-fifths have no AI programs in their products [1]. 2. Round-closing announcements trail the actual closing by several months. Not to mention the actual raising and diligence takes months (even more so for larger/later rounds). Thus the $ reported here does not factor in covid19 and the current economic crisis, as implied. [1] https://ww…

Yup. I once worked for a startup that claimed to be doing DeepLearning, AI and other hyped stuff. The "machine learning" guy, once he allowed us to look at his code (took two years to convince him to do that), was basically doing point and click with Matlab dialog wizards. It was some horribly contrived linear regression that took about a month(!) to train on a couple of millions of data points. But he had a PhD (non…

I was really shocked to learn how common this is.

Credentialism and lack of integrity are rampant throughout the economy. It's soul crushing to see it.

An example that springs to mind is (I believe a YC alum) [1]. CEO is quoted as saying, "The more data we have on what happens over the next few days is going to really accelerate our ability to retrain our AI systems and then help all of you accurately understand tenant risk moving forward into this new world."

A serious modeller would be able to forecast what happens over the next few days. That the company wasn't able to do so strongly suggests to me that the "AI system" didn't have macro factors to shock and that scenario analysis was not part of the system. To a trained eye, that can be a red flag for sloppy modelling (and therefore hype).

[1] https://www.qpbriefing.com/2020/04/06/unconscionable-landlor...

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