Source: Hard AI
From the wave of mergers and acquisitions to venture capital fever, from basic models to upper-level applications, the battle for “ground” among tech giants has reached a heated level.
A fierce AI battle is unfolding in Silicon Valley!
According to the latest report published by service consulting agency Dealroom and Flow Partners, the global technology industry is entering a new innovation cycle represented by AI and automation. The scientific and technological innovation cycle is about once every 20 years. The previous two innovation cycles occurred in the PC era (the spread of personal computers) and the Internet era (including the shift to mobile devices and cloud computing), respectively.
In order to seize the opportunity in this innovation cycle, tech giants are increasing their investment in AI.
According to the report, the “Seven Sisters” of US stocks with a total market capitalization of 14 trillion US dollars (accounting for about 32% of the S&P 500 index) invest up to 400 billion US dollars in AI and cloud infrastructure every year. These investments cover various fields from AI chips and large models to humanoid robots, autonomous driving, and AI healthcare.
The most competitive layer is the hardware layer and model layer of AI. More and more tech giants are rushing into other people's “land” to grab food. For example, Nvidia, which dominates the AI chip market, is facing a collective siege from peers to customers. Tesla, Microsoft, Google, and Amazon are all developing their own AI chips.
In order to concentrate resources, they even sacrifice other businesses. Meta, for example, recently shut down its enterprise collaboration product Workplace, which was once seen as a sign of its full shift to the metaverse and AI.
The battle for “turf”: from mergers and acquisitions to VC
In the past, acquisitions played a key role in “land” battles, but as regulators scrutinize mergers and acquisitions more stringent, tech giants are turning more attention to venture capital.
According to the report, the “Seven Sisters” completed only 7 acquisitions in 2023, but participated in 208 venture capital transactions.
So far this year, the “Seven Sisters” have invested 24.8 billion US dollars in AI companies through venture capital activities, surpassing the total amount of venture capital in the UK each year. The most popular AI startups such as OpenAI, Anthropic, and Wayve are among the most popular giants.
Meanwhile, acquisition activities continued, and Nvidia acquired Israeli startups Run:AI and Deci AI for a total of $1 billion in May.
The activities of the “Seven Sisters” in the field of venture capital have increased significantly, especially those companies that already have a certain scale and performance but have not yet gone public. By 2023-2024, they will become the largest tech VC.
Most of the capital flows into large models and infrastructure, and the economic potential of the application layer is as high as 50 trillion US dollars
Tech giants have a presence at every level of AI, but currently the focus is still on basic technology (big models) and infrastructure levels. The report shows:
Most of the AI investment has gone to the foundational layer (foundational layer), that is, the underlying large model technology that supports AI development, such as OpenAI, Anthropic, Gemini, etc. This investment accounts for about 75% of the tech giants' total investment in AI.
The cloud infrastructure layer (cloud infrastructure layer) accounts for about 42% of total AI investment. Google Cloud, Amazon Cloud Service AWS, and Microsoft Azure are the main players.
The computational layer (computational layer) accounts for 29% of investment, and players include chip and computing power vendors such as Nvidia and Broadcom.
The application layer (application layer) accounts for 32% of total AI investment, and the main players include Waymo, Anthropic, etc.
The ops layer (ops layer) accounts for 42% of the investment, and players have Hugging Faces and Weights & Biases.
The energy layer accounts for 5% of investment, mainly around clean energy generation technology.
Notably, AI investment is gradually shifting to the application layer.
There are plenty of opportunities for AI applications. The report points out that the economic potential of AI in healthcare, equipment, media, software cloud, climate, education, defense, mobile, and manufacturing industries is 50 trillion US dollars.
Industry insiders point out that the ultimate goal of tech giants is to take the lead in implementing general artificial intelligence (AGI). Although it is currently unclear how long it will take to achieve AGI, it is foreseeable that in this new innovation cycle, AI will become a decisive factor in technological competition.
edit/ruby