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OpenAI Under Siege: These Startups Are Battling for AI Supremacy

Last Updated January 8, 2024 9:50 AM
Giuseppe Ciccomascolo
Last Updated January 8, 2024 9:50 AM
By Giuseppe Ciccomascolo
OpenAI startups AI supremacy

OpenAI is one of the biggest names in artifical intelligence world but its supremacy is being challenged by some startups.

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Key Takeaways

  • OpenAI has been a leader in artificial intelligence (AI) research but some new startups are challenging its position.
  • This increased competition is driving innovation and pushing companies to develop new and better AI technologies.
  • It is unclear which company or organization will ultimately dominate the AI field.
  • However, it is certain that AI will continue to play an increasingly important role in our lives.

In a few days, artificial intelligence (AI) could have the third most valuable startup in the world. This is OpenAI, the company led by Sam Altman, which according to Bloomberg  is about to close a round of financing with an estimated valuation of $86 billion. But the value of the company could soon reach $100 billion.

Numbers that would make it the third unicorn after ByteDance – worth $225 billion – and SpaceX, which has a value of $150 billion, in the CB Insights ranking . So far, no further updates on OpenAI’s operations are available. In any case, Altman’s startup, financed by Microsoft with $13 billion last year, is in good company.

US Lead The AI Race

OpenAI faces formidable competition primarily within the United States. Anthropic and Databricks, both based in the USA, as well as InflectionAI, present strong contenders. In 2023, Anthropic secured an impressive $7 billion, with commitments from Google and Amazon contributing $2 billion and $4 billion, respectively.

Additionally, reports from The Information  suggest that Anthropic initiated negotiations in December for a funding round of $750 million, valuing the company at around $18 billion.

Databricks, on the other hand, raised over $4 billion and holds a valuation of $43 billion. The company maintains partnerships with tech giants Microsoft and Google Cloud, along with collaboration with chip giant Nvidia.

Despite the challenging landscape for American venture capital in 2023, where PitchBook data indicates a 60% drop in funds raised compared to 2022, totaling $67 billion, these significant AI startups have managed to attract substantial funding.

AI World Leaders And Their Partners

The field of artificial intelligence (AI) is rapidly evolving, and there are many companies and organizations that are at the forefront of this. Here are some of the world’s leading AI companies and their partners:

OpenAI

OpenAI  is a non-profit research company that is dedicated to developing safe and beneficial artificial general intelligence (AGI). The company has a number of high-profile partners, including Microsoft, Amazon, and DeepMind.

Google DeepMind

Google DeepMind  is a British AI company that was acquired by Google in 2014. The company has made significant breakthroughs in a number of areas, including reinforcement learning and computer vision. DeepMind has partnerships with a number of companies, including Microsoft, Novartis, and BP.

Baidu

Baidu  is a Chinese tech giant that is also a leader in AI research. The company has developed a number of AI products, including its self-driving car program and its natural language processing (NLP) technology. Baidu has partnerships with a number of companies, including Alibaba and Tencent.

Tencent

Tencent  is another Chinese tech giant that is investing heavily in AI. The company has developed a number of AI products, including its facial recognition technology and its AI-powered games. Tencent has partnerships with a number of companies, including Baidu and Huawei.

Amazon Web Services (AWS)

AWS  is a cloud computing platform that offers a wide range of AI services, including machine learning, natural language processing, and computer vision. AWS has partnerships with a number of companies, including OpenAI, Google DeepMind, and IBM.

Microsoft Azure And Copilot

Azure  is a cloud computing platform that is also a major player in the AI market. Azure offers a number of AI services, including machine learning, natural language processing, and computer vision. It has partnerships with several companies, including OpenAI, Facebook, and SAP.

Copilot is a new AI-powered feature integrated into the Windows operating system. It can help users type faster and more accurately by providing real-time suggestions and completions. Copilot is based on Microsoft’s large language model, which has been trained on a massive dataset of text and code. This allows it to understand the context of what you are typing and to suggest relevant words and phrases.

IBM Watson

IBM Watson  is a cloud-based AI platform that is used for a variety of purposes, including fraud detection, customer service, and healthcare. Watson has partnerships with a number of companies, including McDonald’s, GE Healthcare, and the Mayo Clinic.

Salesforce Einstein

Salesforce Einstein  is an AI platform that is integrated into Salesforce CRM software. Einstein may help to improve sales productivity, customer service, and marketing campaigns. Salesforce Einstein has partnerships with several companies, including Cisco, SAP, and Oracle.

Europe And China Challenge Silicon Valley

Despite Silicon Valley’s dominant influence, aspiring unicorns are emerging outside the U.S. as well. In China, startup 01.AI has achieved a valuation of $1 billion, according to Reuters . Meanwhile, in Europe, at least two entities are poised to challenge American counterparts.

The first is the French Mistral , which, in under a year, raised approximately €500 million and boasts a valuation estimated at almost €2 billion, with the backing of U.S. giant Salesforce.

The second is the German Aleph Alpha , which remains somewhat under the radar of big tech. In November, it concluded a half-billion round led by Innovation Park Artificial Intelligence (IPAI), Bosch Ventures, and Schwarz Group.

Unlike France and Germany, Italy does not yet have a national champion in artificial intelligence, leading to an absence of eye-catching financing rounds with big tech involvement in the Italian ecosystem. However, smaller startups are aiming to grow, such as the Italian digital company Webidoo . It has produced Welpy, a marketing assistant for SMEs, and raised 6 million euros in 2021, currently pursuing an ongoing round with a goal of up to 10 million euros.

Other Ambitious Startups

Italian startups often focus on different AI products rather than undertaking the expensive training of new ChatGpts. Aindo , a startup in Trieste affiliated with Sissa, specializes in processing clean, secure, and privacy-proof synthetic data.

The company, which will be present at the Italian pavilion of CES in Las Vegas, has raised €9 million in two rounds. The second, in October, brought in €6 million, and CEO and co-founder, Daniele Panfilo, sees it  as a middle round, with plans to accelerate and attract major international funding within a couple of years.

Ambitious endeavors also characterize the journey of Hodlie, a startup that recently launched an AI platform autonomously managing customers’ cryptocurrency portfolios, minimizing risk and volatility. With over 1,700 users and assets under management exceeding €600,000, Hodlie achieved a monthly growth rate of around 70%.

After closing a first round of €200,000 in the second semester of 2023, the company is currently in negotiations for a new round of at least €1 million, aspiring to replicate the Silicon Valley startup model in a different context with a goal to exceed €1 billion assets under management by 2027.

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Giuseppe Ciccomascolo
About the Author

Giuseppe Ciccomascolo

Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors. Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
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