Silicon Valley VCs navigate uncertain Al future

For Silicon Valley venture capitalists, the world has split into two camps: those with deep enough pockets to invest in artificial intelligence behemoths, and everyone else waiting to see where the Al revolution leads.

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The generative Al frenzy unleashed by ChatGPT in 2022 has propelled a handful of venture-backed companies to eye-watering valuations.

Leading the pack is OpenAl, which raised USD 40 billion in its latest funding round at a USD 300 billion valuation -- unprecedented largesse in Silicon Valley's history. Other Al giants are following suit. Anthropic now commands a USD 61.5 billion valuation, while Elon Musk's xAl is reportedly in talks to raise USD 20 billion at a USD 120 billion price tag.

The stakes have grown so high that even major venture capital firms -- the same ones that helped birth the internet revolution -- can no longer compete. Mostly, only the deepest pockets remain in the game: big tech companies, Japan's SoftBank, and Middle Eastern investment funds betting big on a post-fossil fuel future.

"There's a really clear split between the haves and the have-nots," says Emily Zheng, senior analyst at PitchBook, told AFP at the Web Summit in Vancouver. "Even though the top-line figures are very high, it's not necessarily representative of venture overall, because there's just a few elite startups and a lot of them happen to be Al."