AI giant Andrew Ng's AI Fund, a startup incubator that supports small teams of experts looking for to resolve necessary problems using AI, plans to lift over $120 million for its second tranche.
A submission An SEC evaluation shows that the AI Fund's second fund, AI Venture Fund II, has thus far raised $69.75 million from 13 partners — leaving about $50 million left to speculate. The AI Fund's public relations department declined to comment.
Ng, the founding father of the deep learning project Google Brain, co-founder of Coursera and recently appointed to the board of Amazon, was some of the well-known names within the AI community when he became chief scientist at Baidu in 2014. He left Baidu in 2017 to launch a variety of AI projects, including the DeepLearning.ai Course and Landing AI, a startup that develops AI tools for manufacturing firms.
Ng founded the AI Fund in 2018 with $175 million, serving because the incubator's GP and providing leadership. (In the SEC filing mentioned above, he’s listed as a “managing member of the final partner” for AI Venture Fund II.) The idea was to offer funding on the seed and Series A stages of an organization's lifecycle, allowing teams to work relatively secretly until they were ready—and connecting them with Ng's extensive skilled network.
Greylock Partners, New Enterprise Associates, Sequoia Capital and SoftBank Group were among the many AI Fund's early backers. Crunchbase Lists 38 portfolio firms, including AI commentary platform WhyLabs, Ng's own Landing AI and AI app constructing tool Baseten.
At $120 million, AI Venture Fund II could be significantly smaller than the primary tranche of the AI Fund. Nevertheless, it’s greater than twice the dimensions of Ng According to reports The original hope was to lift $50 million to interchange the AI Fund.
Consider this one other possible sign that the AI bubble – and particularly the much-watched generative AI segment inside it – could also be about to burst.
PitchBook recently reported that for 2 consecutive quarters, generative AI deals within the earliest stages have declined, plunging 76% since their peak in Q3 2023. VC deal value for pre-seed and seed-stage deals fell to $122.9 million in Q1 2024, below the $517.7 million peak in Q3.
The reluctance of firms might be guilty.
In two recent surveys from the Boston Consulting Group, about half of respondents—all C-suite executives—said they don't expect generative AI to steer to significant productivity gains, saying they're concerned concerning the potential for errors and the chance of information compromise that generative AI-powered tools could introduce. As my colleague Ron Miller wrote last week, firms are finding that generative AI is harder to implement at scale than they originally thought—and that executives are cautious.
