Despite Economic Slowdown, A.I. Startups Raised 27 Billion Dollars in Last 3 months
Jul 11
The Rise of AI Startups: What It Means for Small Businesses
The last few years have been historically unfavorable to tech start-ups across the board. As covered previously in the New York Times in December of last year, "after staving off mass failure by cutting costs over the past two years, many once-promising tech companies are now on the verge of running out of time and money". Companies thought to be future heavy hitters like WeWork, who were going to revolutionize workspaces and raised over $11 billion in funding, filed for bankruptcy in November 2023. They are only one of many stories of once-promising startups facing crippling losses in the last six months or so.
However, with the introduction of both extremely capable and widely accessible generative artificial intelligence in ChatGPT created by OpenAI, the doors of this historic unfavorability of the last two years were blown open. As said by Pitchbook last month, "a crop of AI-powered startups rose in rapid succession, challenging big tech’s dominance in cloud computing, search and content creation and editing".
This "crop" is doing incredibly impressive numbers. As reported in the New York Times earlier this month, "Investors poured $27.1 billion into A.I. start-ups in the United States from April to June, accounting for nearly half of all U.S. start-up funding in that period, according to PitchBook, which tracks start-ups. In total, U.S. start-ups raised $56 billion, up 57 percent from a year earlier and the highest three-month haul in two years". It seems that A.I. is the single shining beacon in a struggling economy.
But what does this upswing in AI startups mean for small business owners?
For small business owners, this rise in AI presents both challenges and opportunities. Once these startups get going and AI becomes even more accessible to the average small business owner, AI could streamline various aspects of business operations, from automating routine tasks to optimizing supply chains. By integrating AI solutions, small businesses could improve efficiency, reduce costs, and enhance productivity. AI-powered tools such as chatbots and personalized recommendation systems could significantly enhance customer service, providing instant support and tailored suggestions that create a more engaging customer experience.
However, all of that does rely on these startups making AI tools more accessible both financially and technologically. But what if you wanted to start now in order to not be left behind when all of these cutting-edge startups and ideas finally bloom and take shape?
It's never a mistake to start learning. Finding ways that even just a monthly ChatGPT could help improve your business is a great start, even if you aren't familiar or tech-savvy enough to develop APIs or other AI-integrated programs. Adopting AI technologies now can give small businesses a competitive edge, enabling them to stay ahead of tech trends and implement innovative solutions that differentiate them from competitors and attract a tech-savvy customer base.
The most important thing is that embracing AI is also a step towards future-proofing a business. As AI continues to evolve, businesses that are early adopters will be better positioned to adapt to future technological advancements and market changes.
