TL;DR:
- Nvidia makes its inaugural investment in South Korean generative AI startup Twelve Labs, signaling a strategic move into the emerging technology sector.
- Twelve Labs specializes in hyperscale AI models for video content analysis. A unique focus is setting it apart from its competitors.
- The startup gained recognition by winning a technology contest hosted by Microsoft, showcasing its prowess in video comprehension AI.
- Major investors, including Index Ventures and renowned AI scholar Fei-Fei Li, back Twelve Labs, solidifying its position as a leader in generative AI.
- Twelve Labs’ AI model demonstrates versatility in comprehending various elements within video content.
- The company has been acknowledged as one of the top 50 innovative firms in generative AI by CB Insights and as a promising AI startup in 2023 by Insider.
- The generative AI market has become a battleground for Big Tech companies, with forecasts predicting substantial growth to $1.3 trillion over the next decade.
- Nvidia’s CEO, Jensen Huang, likens the impact of generative AI to that of Apple’s iPhone, highlighting its transformative potential.
- Microsoft, Amazon.com, and Nvidia have collectively invested billions in generative AI startups, with Microsoft leading the way.
- The battle for AI supremacy is expected to conclude within one to two years as tech giants strengthen their positions.
- The rising corporate values of generative AI startups present challenges for venture capitalists, reminiscent of trends in the biotech sector.
Main AI News:
Nvidia Corp., a renowned global chip designer, has made a significant move by venturing into South Korea’s generative artificial intelligence startup landscape. This strategic decision aligns with the growing trend among Big Tech giants like Google and Microsoft Corp., who are eagerly investing in emerging companies with groundbreaking technology, poised for exponential growth.
In a recent development, Nvidia participated in a pre-Series A funding round for Twelve Labs, a South Korean generative AI startup. The startup aimed to raise an impressive 13 billion won ($9.7 million) in this round, as confirmed by industry sources in Seoul. Joining Nvidia in this strategic investment were Samsung Next, the corporate venture capital arm of global memory chip leader Samsung Electronics Co., and local venture capitalist powerhouse Korea Investment Partners.
While Nvidia had been actively supporting South Korean startups through technology education and consulting, this marks its first direct investment in a generative AI startup within the country. This move underscores Nvidia’s commitment to fostering innovation and collaboration within the Korean startup ecosystem.
Sources reveal that Nvidia is gearing up for more investments in Korean startups, with an upcoming event scheduled for the following month. This demonstrates the company’s intent to play a pivotal role in the development and expansion of generative AI technology on a global scale.
Unlocking the Potential of Video Content with Twelve Labs
Founded in 2021, Twelve Labs specializes in the development of hyperscale AI models tailored for video content analysis—a sector ripe for exploration. Notably, this focus differentiates Twelve Labs from major local IT players like Naver Corp. and KT Corp., who primarily concentrate on text-based large language models (LLMs).
Twelve Labs gained significant recognition by winning a technology competition hosted by Microsoft. Their AI model, designed to comprehend video content, outshone competitors, including renowned institutions like Columbia University and tech giant Tencent Holdings Ltd. This victory further solidified Twelve Labs’ position as an emerging leader in the generative AI landscape.
To bolster their vision, Twelve Labs secured investments from major players, including venture capital firm Index Ventures. They also enlisted the expertise of globally renowned AI scholar Fei-Fei Li, a professor at Stanford University, and Aidan Gomez, CEO and co-founder of Cohere—a notable competitor of OpenAI, the creator of the widely acclaimed generative AI chatbot, ChatGPT.
Twelve Labs’ AI model boasts the ability to comprehend diverse types of information within video content, spanning conversations, objective behaviors, text, and logos. This versatility positions the company as a trailblazer in harnessing generative AI for innovative applications across various industries.
A Recognized Trailblazer in Generative AI
Twelve Labs’ innovative approach to generative AI has garnered attention and accolades. CB Insights, a leading provider of market intelligence on venture capital and startups, recognized the company as one of the top 50 most innovative firms driving generative AI applications and infrastructure development across industries. Additionally, Insider, a renowned U.S. financial and business news provider, formerly known as Business Insider, hailed Twelve Labs as one of the most promising AI startups in 2023.
The Intense Competition Among Tech Giants
The generative AI industry has become a battleground for Big Tech companies, driven by the fear of falling behind in critical technologies such as LLMs, AI semiconductors, cloud services, and AI applications. Bloomberg Intelligence’s report predicts explosive growth in the global generative AI market, surging from $40 billion in 2022 to an astonishing $1.3 trillion won over the next decade.
Nvidia’s founder and CEO, Jensen Huang, likened the impact of generative AI to that of Apple Inc.’s iPhone, emphasizing its transformative potential. This sentiment was echoed at SIGGRAPH, the world’s premier computer graphics conference, in August.
Microsoft, Amazon.com Inc., and Nvidia have made substantial investments in generative AI startups, with Microsoft leading the charge by pouring $10 billion into the sector. Amazon.com and Nvidia followed closely, with investments totaling $4 billion and $270 million, respectively, according to data from the U.S. startup industry research firm PitchBook.
The Race’s Timeline: One to Two Years
These tech giants are leaving no stone unturned in their pursuit of promising generative AI startups, irrespective of their nationality or funding stage. Nvidia has been actively involved in Series B rounds for Adept and Inflection AI Inc. in the U.S., along with Series C rounds for Hugging Face Inc. and Cohere. Microsoft has also entered the fray, participating in a Series B round for AI chip startup d-Matrix. Meanwhile, Amazon.com, which joined Hugging Face’s funding round, has committed up to $4 billion to Anthropic PBC, an LLM development startup.
The generative AI market can be categorized into three main sectors: AI infrastructure, AI models for language and information understanding, and applications that leverage these models for consumers. Major technology companies worldwide are currently channeling their efforts into bolstering AI infrastructure while keeping a keen eye on other sectors.
According to an executive at a venture capital firm in Seoul, these Big Tech companies are striving to fortify their weaker areas, such as LLMs and AI chips, through strategic investments. This concerted effort suggests that the battle for AI supremacy is likely to conclude within the next one to two years.
However, the skyrocketing corporate values of competitive generative AI startups pose a challenge for venture capitalists. The allure of these startups, often led by renowned entrepreneurs or backed by strong brand recognition, makes them highly sought-after investment opportunities. This phenomenon mirrors trends seen in the biotech sector, where companies that successfully navigate clinical trials experience soaring enterprise values.
Conclusion:
Nvidia’s strategic investment in Twelve Labs underscores its commitment to shaping the future of generative AI. With Big Tech companies intensifying their investments and the generative AI market poised for exponential growth, this move signifies a significant shift in the technology landscape. As the battle for AI supremacy accelerates, we can anticipate rapid consolidation and innovation within the sector, with far-reaching implications for the broader technology ecosystem.
