AI predictions for 2024: What prime VCs suppose

As 2023 attracts to an in depth, it’s a time of reflection on the monumental advances — and moral debates — surrounding synthetic intelligence this previous yr. The launch of chatbots like Bing Chat and Google Bard showcased spectacular pure language skills, whereas generative AI fashions like DALL-E 3 and MidJourney V6 surprised with their inventive picture era.

Nonetheless, considerations have been additionally raised about AI’s potential harms. The EU’s landmark AI Act sought to restrict sure makes use of of the expertise, and the Biden Administration issued pointers on its improvement.

With fast innovation anticipated to proceed, many marvel: What’s subsequent for AI? To seek out out, we surveyed main enterprise capitalists investing in synthetic intelligence startups for his or her boldest predictions on what 2024 could convey. Will we see one other “AI winter” as hype meets actuality? Or will new breakthroughs speed up adoption throughout industries? How will policymakers and the general public reply?

VCs from prime companies together with Bain Capital Ventures (BCV), Sapphire Ventures, Madrona, Common Catalyst and extra supplied their outlook on subjects starting from the way forward for generative AI to GPU shortages, AI regulation, local weather change purposes, and extra. Whereas views differ on dangers and timelines, most agree: 2024 guarantees to be a defining yr for synthetic intelligence. Learn on for his or her boldest predictions and insights on what’s to return in AI.

The rise and fall of generative AI startups

“Many generative AI corporations will die. In the event you weren’t one of many startups that raised monster rounds this yr, the longer term shall be unsure for you. Many [generative AI] corporations will compete with one another, startups constructed on prime of OpenAI will expertise platform danger, and fundraising into these corporations will dry out. At Day One, we’ve stopped taking a look at these offers altogether. 

I’m enthusiastic about AI in biotech, genome, local weather and industrial purposes. AI will save lives by serving to scientists and researchers develop new therapies and diagnostics based mostly on human genomic information. Within the psychedelics {industry}, our portfolio firm Mindstate is utilizing AI to create new “states of thoughts” based mostly on their largest complete information set of journey reviews to assist deal with treatment-resistant PTSD. AI in fertility, reproductive and longevity will fully alter the paradigm of people’ lifespan and the way we now have kids. In local weather, corporations are utilizing AI to defend our ecosystems, like how Vibrant Planet is utilizing AI/ML to forestall catastrophic wildfires which can be occurring globally.

AI may even be capable to learn what’s occurring in individuals’s minds and challenge pictures of their ideas—it’s fairly fascinating and I’m curious to see the way it’ll unlock information about human consciousness and unconsciousness.

Masha Bucher, Founder and Common Accomplice at Day One Ventures

Convergence of information modalities in multimodal fashions

“In 2024, the convergence of information modalities—textual content, pictures, audio—into multimodal fashions will redefine AI capabilities. Startups leveraging these fashions will allow higher decision-making and improved consumer experiences, together with personalization. We are going to see novel and transformative use instances throughout industries like manufacturing, e-commerce and healthcare. On the infrastructure facet, AI workloads will change into extra demanding, and I anticipate to see innovation round multimodal databases. Whereas not each use case would require multimodal fashions, first era LLM startups in lots of sectors will face new competitors and the stress to proceed to innovate and construct defensibility shall be intense.”

Cathy Gao, Accomplice at Sapphire Ventures

“We’re going to see multi-modal retrieval & multi-modal inference take heart stage in AI merchandise in 2024. AI merchandise in the present day are largely textual. However customers favor extra expressive software program that meets them in each modality, from voice to video to audio to code and extra. If we will get these architectures to work at scale, we might unlock software program that gives way more correct and human outcomes, from drawing the reply to creating calls in your tone and voice so you possibly can attend much less conferences to converging on the best end result through collaboration with different AI and human entities. To energy this, we anticipate ETL suppliers like Unstructured to diversify to incorporate new information sources, extra startups making use of the Section Something structure from Meta, and startups like Contextual turning into full-scale options for multi-modal retrieval.” 

Rak Garg, Vice President at Bain Capital Ventures

“We proceed seeing AI blossom into extra use instances, particularly in industries which can be each massive and rusty. In healthcare we’re enthusiastic about the potential of utilizing laptop imaginative and prescient to detect most cancers, for utilizing machine studying to assist with higher diagnoses, and of utilizing generative AI to cut back paperwork. Contemplate we spend $4.3 trillion in healthcare within the US, which as a % of our GDP is sort of double of the typical of OECD, and that just about a 3rd is simply in administrative prices… And whereas Chat has been a key buzzword of 2023, corporations have to suppose past Chat in 2024.  Multimodal AI throughout enter, coaching, mannequin creation and output are key areas of innovation.”

Amit Garg, Managing Accomplice at Tau Ventures and Sanjay Rao, Managing Accomplice at Tau Ventures

“Multimodal fashions will make it a lot simpler to create compelling interactions with AI brokers and the standard of the AI will make it practically unattainable for people to discern the distinction between a pc and a human in sure use instances. We will see this already in locations like Character.AI and Instagram and anticipate this to take maintain within the office in areas like coaching, buyer assist, and advertising / gross sales. You’ll be constructing a relationship with a machine before you already know.”

Jess Leao, Accomplice at Decibel VC

Democratization of AI by way of open supply

“We predict that extra open-source fashions shall be launched in 2024, and we’re particularly taking a look at massive tech corporations to be one of many main contributors. Some examples of this might embrace corporations like Tesla, Uber and Lyft (traditionally each large contributors to open-source initiatives), and even Snowflake. We might not be shocked if a few of these fashions spun out into corporations and acquired massive funding rounds.”

Vivek Ramaswami, Accomplice at Madrona and Sabrina Wu, Investor at Madrona

“I see multimodal turning into the de facto commonplace for any massive mannequin supplier by H2’24. The marquee mannequin builders who’ve traditionally maintained proprietary fashions will start open-sourcing choose IP whereas releasing new benchmarks to reset the dialog round benchmarking for AGI.”

Chris Kauffman, Accomplice at Common Catalyst

“There’s a race-to-the-bottom in generative AI pricing between OpenAI, Mistral, Google, and others serving open-source fashions. Most are incurring losses utilizing the present {hardware} infrastructure (evidenced in per-token enter/output prices) and hoping to make it up on quantity. The crucial for generative AI corporations is obvious: discover pathways to profitability and scalability. Based mostly on this want, I imagine VC investments will go towards creating environment friendly fashions, leveraging new AI compute {hardware}, and offering value-added providers like industry-specific mannequin fine-tuning and compliance.”

Jimmy Kan, Accomplice at Anzu Companions

GPU scarcity: A persistent downside or a brief setback?

“2024 would be the yr of actual time diffusion purposes. In 2023, we noticed some main theoretical enhancements in diffusion mannequin inference speeds — akin to the unique consistency fashions paper by Track et al, and, extra lately, LCMs. (Additionally, Adversarial Diffusion Distillation.) We’re already beginning to see initiatives that use these concepts, akin to Dan Wooden’s Artwork Spew (77 512×512 pictures per second, on a single 4090), Modal’s turbo.artwork (based mostly on SDXL Turbo), and fal.ai’s 30fps face swap. In 2024, we’ll see extra realtime picture, audio, and video era diffusion purposes.” 

Slater Stich, Accomplice at Bain Capital Ventures

“The GPU scarcity continues to ravage the startup ecosystem, making it onerous for brand new corporations to convey their merchandise to market. There are two methods to resolve this downside; both new compute choices emerge that break freed from the Nvidia monopoly on AI, or new fashions/architectures emerge which can be extra environment friendly with compute assets. I anticipate to see massive quantities of funding go in direction of novel mannequin architectures that run in linear, not quadratic time, akin to Mamba from Cartesia AI, along with platforms constructed round diffusion fashions and liquid neural nets as a sooner, cheaper, extra performant different to transformer-based LLMs.” 

Rak Garg, Vice President at Bain Capital Ventures

“For starters, the GPU scarcity will not be essentially as acute or definitive as everybody would possibly suppose. The larger subject is the famine of utilization for present infrastructure therein, which I imagine will persist in 2024 alongside continued provide chain constraints. Fixing lower-level software program for AI would be the key to resolving the illusory GPU ‘scarcity’”’ and way more actual utilization points. Till then, the one short-term resolution we now have is, merely, extra computation. That stated, I predict GPU constraints to persist in 2024, with the NVIDIAs of the world experiencing continued backlogs, whereas opponents (particularly AMD and Intel) will every acquire 1-2% of GPU market share on account of demand-side desperation.”

Chris Kauffman, Accomplice at Common Catalyst

“A contrarian take is we’ll ultimately *not* have a GPU scarcity. The market will converge to a small handful of patrons and suppliers. Nvidia and others will scale as much as meet forecasted demand, and Microsoft, Google, Amazon, Fb, and lots of sovereign nations will nonetheless be massive patrons. The remainder of us will hire them from the cloud suppliers however there shall be loads of leasable capability to go round. The wealthy will get richer, however high quality of life will enhance for the ‘GPU-poor’.”

Jess Leao, Accomplice at Decibel VC

“In response to the Taiwan Semiconductor Manufacturing Firm (TSMC) Chairman, ‘it’s not the scarcity of AI chips. It’s…our COWOS [advanced chip packaging] capability,’ and superior reminiscence and packaging capability will ramp; nevertheless, the long-term sustainability of AI in manufacturing gained’t depend on general-purpose GPUs like Nvidia H100 and AMD MI300X. Investments will shift to give attention to {hardware} specialised for inference, somewhat than coaching. NPU improvements like d-Matrix and EnCharge AI, using close to/in-memory computing, are rising as cost-effective and environmentally pleasant options, appropriate for deployment each on native AI PCs and inside information facilities.”

Jimmy Kan, Accomplice at Anzu Companions

Apple and Google: Sleeping giants?

“We imagine 2024 will convey some large releases from Apple, even perhaps their very own GPT.  There have been reviews of an Apple LLM recognized internally as Ajax GPT. Whereas the mannequin was created for inside use, subsequent yr we might see Apple making Ajax (or associated fashions) extra public, or incorporating generative AI capabilities throughout its apps (e.g. XCode, Apple Music) and gadgets (e.g. Mac, Imaginative and prescient Professional). And whereas this was extra machine studying than AI, simply final week Apple launched MLX – an “environment friendly machine studying framework particularly designed for Apple silicon.” Releases from Apple might have huge affect over not solely present fashions however how the US approaches regulation, given Apple’s outstanding position as a shopper system producer.”

Vivek Ramaswami, Accomplice at Madrona and Sabrina Wu, Investor at Madrona

“If 2023 was the yr of Open AI and Microsoft owned the airwaves, subsequent yr we’ll all be speaking about Google. Google’s substantial funding in Gemini and unmatched information and compute assets will supply builders GPT-4+ capabilities in all sizes and styles, pushing the frontier for all basis mannequin suppliers. Don’t rule them out simply but.”

Jess Leao, Accomplice at Decibel VC