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How Generative AI is Disrupting Startups

Updated: Jun 28, 2023

Generative AI refers to technology that can produce images, videos, text, audio, and other forms of content. With the recent buzz around ChatGPT (a chatbot released by a San Francisco-based AI lab called OpenAI), it comes as no surprise that the subsector is receiving attention from investors. $49 billion of venture capital investments in 2020 went into AI, and the generative AI subsector investments have increased by 425% since 2020 alone.


Since then, the funding landscape has only continued to grow. A generative AI startup called Jasper that aims to help consumers generate content for their businesses quicker has gone on to raise $125 million in October of 2022, reaching a $1.5 billion valuation. That same month, Stability AI reached a $1 billion valuation after raising $101 million.

However, the developments show strong potential for disrupting the startup and venture capital ecosystem. One of the sectors set to be the most impacted is that of gaming. With their focus on real-time consumer experiences, generative AI is set to be a disruptor. For starters, it can dramatically reduce the time needed to create visuals in gaming, and this is a similar case for the PropTech sector. Generative AI can transform the construction industry which has seen little to no disruption over the past few decades through faster architectural prototypes in the design process.


Companies to watch

Microsoft Flight Simulator is a disruptor in the gaming space, enabling consumers to fly around the virtual world it generated in partnership with blackshark.ai, a company that works to create 3D diagrams of the earth to increase engagement in gaming. Charisma.ai is another startup in the gaming space enabling players to develop interactive stories in engaging formats, utilizing emotion, memory and subplots.

Maket is a generative design startup for architectural planning. They leverage artificial intelligence to generate prototypes of floor plans in seconds, streamlining the design process for architects, developers and builders. Their platform also allows for real-time direct collaboration between the designers and home buyers to allow for seamless collaboration as opposed to back and forth in emails. Maket’s use of generative AI allows architects and designers to save 40+ hours of time in the design process, and shows promise of disrupting the PropTech sector. They have received funding from Dispatch Ventures, Techstars, Team Ignite Ventures, and Front Row Ventures.

Risks

Though generative AI provides ways for companies to and consumers to streamline their workflows, there are several valid concerns to address. There may be misrepresentation in the images, content and videos produced by the platforms. With ChatGPT, the content produced resembles that of a real persona, and this has prompted discussions regarding AI regulation such as policies being implemented by post-secondary institutions.


Key takeaways

Despite the risks, consumer interest in generative AI continues to rise, and as a result venture capital investments into startups operating in the sector are expected to grow with notable interest in the gaming and proptech industries.



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