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$1B Invest Plans in Enterprise AI Startups By Sapphire Ventures

$1B Invest Plans in Enterprise AI Startups By Sapphire Ventures

Sapphire Ventures, A VC firm has made public their interest in investing more than $1 billion in AI-related enterprise startups, this will demonstrate a strong appetite among investors for cutting-edge AI tech.

According to Reuters reports, Sapphire has an existing fund of about $10 billion under management and about $3 billion waiting to be deployed. The $1 billion in capital will come from Sapphire’s existing funds. Sapphire will invest the majority in the form of direct investments in AI startups, some of the investments will go to early-stage AI-focused venture funds which will come through Sapphire’s limited partner fund, Sapphire Partners.

The Co-founder and CEO of Sapphire Nino Marakovic says that based on this investment, Sapphire will focus primarily on B2B software companies that make AI easily accessible by leveraging data to predict outcomes better. According to Nino Marakovic, the firm is fully ready to back Machine Learning and AI startups in improving business incomes for specific verticals, such as manufacturing and healthcare.

“AI represents a profound technology shift, and our $1 billion commitment reflects our conviction in the opportunity,” Marakovic said in a canned statement. “We believe companies are only beginning to see the benefits of AI and GenAI, specifically. Soon, we expect there to be a massive, AI-driven productivity boom that will benefit workers at every level and create value throughout the global economy. We’re eager to back the next wave of enterprise innovators driving this evolution.”

In addition to the $1 billion push, the firm also intends to create an AI Community which is part of its Sapphire Communities platform for portfolio company CEOs and executives. With this implementation, AI will continue to flow across its internal workflows and incorporate AI tools across job functions to help drive efficiencies.

According to PitchBook data, AI startups will continue to perform exceptionally well relative to the broader market which collectively is raising to $15.5 billion this year 2023. The median post-money valuation for AI firms is up 109.8% from 2022.

This investment could pay dividends should the rosiest predictions come true. From research, AI has the potential of contributing $15.7 trillion to the global economy by 2030, while the generative AI market could add as much as $4.4 trillion to the economy annually. The introduction of AI will increase the productivity of products.

As the AI sector is massively increasing, other corporate arms are becoming increasingly leveraged in the sector, as well, chasing after the enormous potential windfall. So apart from Sapphire, whose AI investments include DataRobot, ThoughSpot, Clari, and Moveworks, other firms are betting substantial cash on AI ventures.

Firms like Salesforce’s VC division, Salesforce Ventures, are planning to invest $500 million into startups developing generative AI technologies.

Another firm Workday has also added $250 million to their existing VC fund specifically to back AI and machine learning startups. The company behind the viral ChatGPT, OpenAI, has raised a $175 million fund to invest in AI startups. In June 2023, Dropbox launched its $50 million AI-focused venture fund. AWS was left out, AWS has indicated interest to put $100 million into a program to fund generative AI initiatives.

We still have firms like PwC and Accenture, which have announced their plan to invest $1 billion and $3 billion, respectively, in the AI sector.

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