Generative Artificial Intelligence: Silicon Valley’s Powerful Comeback
In 2022, Silicon Valley experienced a significant downturn in the stock market, leading to a decrease in corporate orders, particularly in cloud services, and a substantial number of layoffs. However, a sudden surge of 41% in venture capital investments in the first quarter of 2023, compared to the last quarter of 2022, has revitalized the region. This resurgence is primarily due to the excitement around generative artificial intelligence (AI), sparked by the launch of ChatGPT in late November 2022.
The Big Tech Leap
All the Big Tech companies, including those in China, have accelerated their pace to keep up with the impressive lead taken by Microsoft in partnership with OpenAI, the creators of ChatGPT. This has led to the birth of numerous startups. Another factor contributing to this explosion is the shift in focus from metaverse or Web3 technologies to generative AI, following the disappointing outcomes of Web3 promises.
The Disappointment of Web3
Meta-Facebook’s significant commitment to Web3 is believed to be the reason behind its delay in launching generative AI products. The Guardian posed the question on May 11, “Can AI help make the company [Meta] relevant again?”
The “Brain Valley”
While it’s uncertain whether all these new AI startups have a sustainable business model, investors are flocking to this sector, fearing they might miss out. Many of these startups are developing their products around the large language models (LLMs) of AI developed by a few Big Tech companies. Many projects are, in fact, features rather than standalone products.
The Risk
However, there’s a risk that Big Tech companies might stop providing access to their language models for others to create new products. OpenAI has quietly announced that it’s closing access to its GPT-4 system, which powers ChatGPT. Twitter has also suspended access to its platform for external developers.
The Return to Silicon Valley
Many engineers who left Silicon Valley and San Francisco during the lockdowns are returning to establish companies primarily offering products based on generative AI. The Hayes Valley neighborhood in San Francisco, where these entrepreneurs are concentrated, is now referred to as the “Brain Valley,” in reference to (artificial) intelligence. Remote work seems to have been forgotten in these startups!
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