Venture Capital's AI Boom Amidst an Investment Glut

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TECHNOLOGY 뉴스

VENTURE CAPITAL,ARTIFICIAL INTELLIGENCE,STARTUPS

Despite a significant overhang of investments from the zero-interest rate era, venture capital is doubling down on artificial intelligence, as evidenced by Databricks' recent $10 billion funding round.

Depending on where you sit in the investment world, the venture capital business is either in rude health or facing something of an existential crisis. Like many people in tech these days, start-up investors have backed artificial intelligence to the hilt. The latest evidence came with this week’s news that Databricks, a provider of software to gather and analyse large volumes of data, has raised another $10bn, one of the largest private investment rounds ever.

Their willingness to put up the kind of large amounts that would once have required Wall Street involvement shows how some of the biggest venture investors are navigating the AI boom with a distinct swagger. But doubling down on AI has coincided with a period of severe indigestion for the world of start-up investing at large. The industry has barely begun to work its way through an immense overhang of investments from venture’s Zirp era — the period, ending in 2021, when a zero-interest rate policy brought a flood of capital into tech start-ups. This has left about $2.5tn trapped in private unicorns, or companies with a valuation of $1bn or more. At least, that’s the combined value these companies claimed after their last fundraisings, according to PitchBook. When it comes to actually trying to cash in these chips through initial public offerings or the M&A market, the returns are likely to be a lot less. How much of the venture business will be left standing after the eventual reckoning is hard to tell. First, consider the scale of the bet on AI. Databricks set out to raise $3bn-$4bn in its latest round, but chief executive Ali Ghodsi said that investors had offered $19bn (he decided to roughly split the difference). Given the overwhelming level of demand, Databricks’ latest valuation doesn’t look outlandis

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