AI huge shot Andrew Ng’s AI Fund, a startup incubator that backs small groups of consultants seeking to remedy key issues utilizing AI, plans to boost upward of $120 million for its second tranche.
A filing with the SEC reveals that the AI Fund’s second fund, AI Enterprise Fund II, has up to now amassed $69.75 million from 13 companions — leaving round $50 million to be invested. The AI Fund’s PR declined to remark.
Ng, the founding father of the Google Mind deep studying venture, co-founder of Coursera, and recent Amazon board appointee, was one of the crucial recognizable names within the AI group when he grew to become Baidu’s chief scientist in 2014. He left Baidu in 2017 to jumpstart numerous AI ventures, together with the DeepLearning.ai course and Landing AI, a startup creating AI instruments focusing on manufacturing firms.
Ng launched the AI Fund in 2018 with $175 million, serving because the incubator’s GP and main its path. (On the aforementioned SEC submitting, he’s named because the “managing member of the overall associate” for AI Enterprise Fund II.) The concept was to offer funding on the seed and Sequence A phases of an organization’s life cycle, permitting groups to work in relative stealth till they had been prepared — and connecting them with Ng’s intensive skilled community.
Greylock Companions, New Enterprise Associates, Sequoia Capital and SoftBank Group had been among the many AI Fund’s preliminary backers. Crunchbase lists 38 portfolio firms, together with AI observability platform WhyLabs, Ng’s personal Touchdown AI, and AI app-building device Baseten.
At $120 million, AI Enterprise Fund II could be significantly smaller than the primary AI Fund tranche. Nonetheless, it’s greater than double what Ng reportedly initially hoped to boost — $50 million — for the AI Fund’s follow-up.
Take it as one other potential signal that the AI bubble — notably the buzzy generative AI phase inside it — could also be deflating.
PitchBook not too long ago reported that, for 2 consecutive quarters, generative AI dealmaking on the earliest phases has declined, plummeting 76% from its Q3 2023 peak. VC deal worth for pre-seed and seed-stage offers fell in Q1 2024 to $122.9 million, down from Q3’s excessive of $517.7 million.
Enterprise reluctance might be in charge.
In a pair of recent surveys from Boston Consulting Group, about half of the respondents — all C-suite executives — mentioned that they don’t anticipate generative AI to result in substantial productiveness good points and that they’re nervous concerning the potential for errors and knowledge compromises arising from generative AI-powered instruments. As my colleague Ron Miller wrote last week, companies are discovering that generative AI is tougher to implement at scale than they as soon as assumed — and that execs are exercising warning.
