There is no doubt that artificial intelligence will significantly change our world in the long term. But for now, we may be living in an AI bubble.
Those looking for evidence of this might cite the news that Cognition Labs is seeking a $2 billion valuation. wall street journal Saturday.
Founded in November, Cognition Labs has developed Devin, which it calls “the first fully autonomous AI software engineer.” No actual revenue is being generated. I launched Devin this month.
Earlier this year, the startup raised $21 million in a deal valued at $350 million. He then turned down an offer that valued him at $1 billion. Well, according to journalis in talks with investors for a deal that could be worth up to $2 billion.
This is an astonishing number for a new business. But in today’s AI field, that’s not that shocking. Google-challenging AI search startup Perplexity secured funding a few weeks ago, increasing its valuation to $1 billion from $520 million a few months ago, and counts Amazon founder among its backers. This includes Jeff Bezos. Mistral, a French AI startup founded just over a year ago, reached a valuation of $2 billion in December.
“Every bubble has a compelling story.”
Each of these startups has the potential to justify its lofty valuations. But as more AI ventures reap incredible sums from investors who spread their bets, there is a growing sense of a bubble among some observers.
Albert Edwards, chief global strategist at Societe Generale, is among the skeptics.
“Every bubble has a compelling story,” he wrote in a note this week. “The current narrative focuses on predictions that AI will cause corporate profits to skyrocket, fully justifying the current stratospheric valuations. Those of us who lived through the late 1990s [tech] Bubbles have heard it all, and keep our eyes skyward. ”
As for Devin, “a lot of companies are working on variations of this idea,” venture capitalist David Sachs noted on a recent episode. all in podcast. He likes the venture’s “agent-first approach” to generating new software projects, but “I think this would be trickier and more difficult when working with an existing codebase.” , a challenge that other AI startups are tackling.
One of Devin’s advantages, he added, is that he “demos very well.”
Of course, it remains to be seen whether a cool demo that surprises investors today will lead to a thriving company in a few years. Either way, today’s eye-popping valuations for unproven startups will be remembered.
