Generative AI is one of the fastest-developing areas of artificial intelligence. Various businesses have invested in improving and adopting this technology. The total pool of money spent on these solutions in 2023 was estimated at $16 billion, and it is expected to reach $143 billion by 2027.
The beginning of 2024 already shows a glimpse of the future of generative AI startups. Our guide delves deep into the market of generative AI startups, estimates how many there will be by the end of the year, the generative AI revenue, and the latest trends that will shape the landscape of this technology.
Latest Generative AI Statistics
Currently, several significant statistics demonstrate the state of the generative AI landscape.
- The market for these solutions will grow annually by 37,3% between 2024 and 2030.
- The added value of generative AI will amount to up to $4,4 trillion per year.
- According to a Gartner report published in October 2023, half of the 1,400 surveyed organizations are increasing investments in generative AI solutions.
- The global market size for generative AI will reach $51,8 billion by 2028.
- Between 2023 and 2028, the market CAGR will be at 35,6% annually.
- Venture capital and big tech companies invested an estimated $10,68 billion into generative AI solutions in 2023.
Why Are Investors Interested In Generative AI?
There are several reasons why investors are pouring billions of dollars into generative AI startups.
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Global impact
Investing in generative AI leads to the potential solution to many issues facing the world, such as providing equal access to education, healthcare, and even weather predictions that will help deal with global climate change.
Market potential
Companies financing the generative AI market gain potential access to various industries such as manufacturing, finance, healthcare, and education, opening the doors for advanced capabilities in each.
Innovation
Generative AI is currently spearheading most innovations made in different areas, leading to better growth, process optimization, and increased profits.
Acquisition potential
Large investment companies often buy successful generative AI startups to utilize their technology in daily operations. For example, Microsoft owns 49% of OpenAI and is one of its prime investors, with $13 billion in overall funding.
Early-stage opportunities
Many generative AI startups are in the early stages of development. They offer investors funding opportunities with significant promise of returns. Early involvement with successful AI firms can bring them primary income.
Competitive advantages
Venture capital firms and significant investors use generative AI capabilities to enhance their organizations' productivity and foster innovation. Each produced generative AI statistic allows them to improve supply chains and upgrade business models.
Which Industries Use Generative AI?
In recent years, generative artificial intelligence has become a significant part of many industries. Here are the latest statistics on generative AI use in different sectors and the results of this integration.
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- Advertising. Companies working in marketing use generative AI to create content such as text, images, and videos for various audiences. They also utilize the technology for targeted advertising materials. According to TRG, AI adoption increases email conversion and revenue by 41%.
- Automotive. Car manufacturers rely on these solutions to build designs and layouts and optimize aerodynamics and fuel efficiency. Generative AI also helps create data used in training autonomous vehicles and reduces greenhouse gas emissions by 30%.
- Education. Technology allows institutions of all budgets and sizes to create learning content, such as textbooks and tests, resulting in personalized learning materials. Adaptive courses built using AI can improve test scores by 62%.
- Fashion. Companies working in the fashion industry utilize this technology to design new patterns and clothing items. They also use gen AI to predict trends in this field and produce tailored designs.
- Healthcare. Organizations in this sector need generative AI to research and produce drugs faster. These solutions predict molecular structures that can be used in new types of medications and cut the production process by 25%. They also help gather and create research data.
- Legal. Firms in the legal sector heavily utilize generative AI to analyze and review legal documents. Modern solutions analyze and assess these files and provide crucial data points, saving legal experts time and effort and reducing risks of human errors. According to generative AI statistics by Gartner, 30% of law firms claim to have improved productivity thanks to these solutions.
- Manufacturing. Companies working in this field help make new products and improve existing ones. The gen AI products achieve this by identifying the most effective designs based on costs, materials, and performance.
How Many Generative AI Startups Will There Be In 2024?
Now, it is too early to speculate on what the landscape will look like by the end of this year. The latest statistics on generative AI show there are about 67,200 firms that are working in this sector. In December of 2023, this figure was at around 50,000 companies, indicating that the interest in generative AI is going away any time soon. As previously, 25% of these firms are based in the United States.
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If these trends continue, the number of generative startups may reach 100,000 worldwide. Of course, the final figure depends on the generosity of venture investors and developments in this artificial intelligence technology sector. By 2025, the global market for these solutions will exceed $22 billion, with North American companies holding 41% of the generative AI revenue shares.
Top Generative AI Startups To Follow In 2024
Although there’s yet no word of any new startups being founded this year, many companies will play major roles in this field. The most promising among them are OpenAI, Anthropic, Hugging Face, Perplexity AI, AI21 Labs, Glean, and Jasper.
The creators of ChatGPT have recently rocked the world of generative AI by introducing the Sora text-to-video model. While the tool currently creates only 60 seconds of content per request, the material quality shows how far the company has gone with its AI research. The billions of dollars Microsoft and other investors have poured into OpenAI shows that the company can make video content creation obsolete.
- Funding: $11,3 billion.
- Company size: 770 employees.
- Best product: Sora.
Founded by former members of ChatGPT creators, Anthropic continues to focus on responsible AI development. Since 2023, the startup has been constantly improving its Claude chatbot. Users from the US and the UK use the platform for free. It shows the future of text generation, specializing in summarization, content creation, and customer support.
- Funding: $4,1 billion.
- Company size: 267 employees.
- Best product: Claude 2.1.
This platform has been a center for machine learning and artificial intelligence research and development for almost a decade. The startup, while not directly involved in generative AI development, plays a significant role in the community. Here, enthusiasts find various open-source projects and tools specializing in audio, image, and text classification, to name a few.
- Funding: $395,2 million.
- Company size: 10 employees.
- Best product: Hugging Face platform.
Established in 2019, Glean works in generative AI that makes it easier to search company data. The company works with startups from the Fortune 50 list, including Duolingo and Grammarly. Gleans search engine provides personal recommendations and results based on insights from ongoing tasks and trends.
- Funding: $100 million.
- Company size: Unknown.
- Best product: Glean tool.
In marketing, Jasper is one of the top generative AI platforms. Its solutions scan the tone of voice and style used by different companies and create content based on the brand’s language and techniques. The platform is widely popular among businesses requiring a coherent brand image across various digital marketing channels.
- Funding: $1,5 billion.
- Company size: 150 employees.
- Best product: Jasper platform.
The California-based startup has worked on AI chatbots and search engine products since 2022. This platform allows users to conduct searches and get results by chatting with these solutions. It's widely popular among users, enjoying millions of monthly visitors. The platform supports access to such models as Google Gemini, GPT-4, and Claude 2.2 for $20/month.
- Funding: $520 million.
- Company size: 38 employees.
- Best product: Perplexity AI platform.
One of the oldest generative AI startups, AI21 Labs, offers users access to versatile solutions. With its products, it's possible to streamline tasks like content generation, application development, and language modeling. These tools offer an affordable way of making custom business apps using the firm’s generative AI models, such as Jurassic 2.
- Funding: 1,4 billion.
- Company size: Unknown.
- Best product: AI21 Studio.
