AI is Driving Venture Capital, Small Businesses Lead on GenAI Adoption, and New AI Chatbots Emerge

Welcome to SV-AI (Silicon Valley - Accelerates Innovation), my newsletter focused on the responsible development and deployment of innovations strengthening California's global competitive edge. Please subscribe to receive upcoming editions. Here, I’ll share tech policy news and leadership insights that you need to know and how technologies, like Artificial Intelligence, are being used IRL. In this edition, I’ll share how AI continues to drive VC investment, insights for companies integrating AI into their operations, and an AI use case providing a wealth of knowledge on green technologies and our climate.??

AI 101?

EY’s “Better Innovation” Podcast – hosted by EY Global Tax Innovation Leader Jeff Saviano – has been a valuable resource for me when learning more about AI’s global reach. One particular episode with futurist and innovation catalyst David Schrier dives into the EU AI Act and the landmark legislation’s impact on governments worldwide – I highly recommend a listen.??

As we’ve seen since its passage, the EU AI Act's influence has extended far beyond European borders. As David Shrier rightfully pointed out, "Europe is now [one of the] global standard-setters in AI." We're already seeing other countries, like Canada and Japan, looking to align their AI governance frameworks with the EU's approach.

So what does that mean for policymakers and industry leaders in the U.S.?

As the EU AI Act is rolled out over the next few years, our national and state leaders can expect to see a transformation in how AI is developed, deployed, and governed across the Golden State and beyond. This presents both challenges and opportunities for innovation.

For businesses and policymakers alike, staying informed and proactive in addressing these new standards will be crucial. Companies developing and deploying AI systems for the EU market will need to adapt their practices to meet the Act's requirements – many of which also have a home here in the Bay Area.

I’ll be interested to see how the EU AI Act will continue to impact technology companies based in our region and abroad.?

And, as our AI regulatory policy is developed in the US - I am hopeful we can continue to advance the dialogue with a collaborative approach that more closely includes many of our leading companies, which to me is our best opportunity to get this right.??

Check out the full podcast episode here and let me know what you think.

AI is Driving Venture Capital

A new study from Pitchbook gives business leaders and industry experts new insight into just how powerful AI technology has been in driving the venture capital market.

The biggest takeaways?

• There were 13 new U.S. AI unicorns — private companies that reached valuations of over $1 billion — between January 1 and June 25 of this year.

• Overall U.S. unicorn value has grown by $162 billion this year alone.

• AI has accounted for over 20% of venture dollars invested in North America and Europe in 2023.?

I believe the rise of AI – and its impact on the innovation economy – is just beginning.?

The current surge in AI investment represents a significant shift in the venture capital landscape and is a testament to the power of this new technology – powered by industry leaders and experts right here in the heart of Silicon Valley.?

I’m interested to see how this trend will drive economic growth and new AI solutions across the tech, healthcare, and education sectors. As Silicon Valley continues to be the epicenter of AI innovation, it will be fascinating to watch how these unicorns leverage their newfound capital to transform the way our communities work and live.

Check out the study here .?

Small Businesses Lead the Generative AI Boom

The San Francisco Federal Reserve recently convened a roundtable of small business executives from across the Twelfth District to discuss the impact of generative AI on their operations – and I found the insights from this discussion particularly relevant to our tech-driven ecosystem.?

Here’s what I found most insightful for business leaders:

• Early adoption is key. Small businesses are already leveraging GenAI for back-office tasks like data management, marketing, and inventory forecasting. Some are exploring customer-facing applications, such as personalized hospitality services and automated sales calls.

• Businesses that use generative AI can expect a productivity boost. Roundtable speakers reported significant time savings on routine operations, with GenAI complementing existing automation processes rather than replacing them entirely.

• Integrating AI into our daily workstreams will change the way we do business. While GenAI may reduce headcount in some areas, it's also creating new roles focused on AI integration. Additionally, it's freeing up employees to focus on higher-value, client-facing tasks.

• Generative AI will change the future of work. As college students increasingly use GenAI in their studies, we can expect a growing pool of AI-literate talent entering the job market.

Small businesses and start-ups are an imperative part of Silicon Valley’s innovation ecosystem, so it’s no surprise they’re on the frontier of generative AI technology. I’ll be following these trends closely, especially as I continue to meet with business leaders in the Bay Area and beyond.?

Read the full article here .?

AI Mayor’s Race

In a blog post by SVLG’s SVP of Tech Policy Peter Leroe-Mu?oz, he spotlights a new phenomenon: a candidate claiming to be artificial intelligence has filed for the Mayoral race in Cheyenne, Wyoming.

Here’s where the Secretary of State and local County Clerk landed –? the AI candidate can run for office, but the human operator is officially named on the ballot. As it stands now, the operator – Victor Miller – is the candidate on the ballot, but Miller insists that the “VIC” (Virtually Integrated Citizen) would be making all the political decisions.

“The candidacy of VIC raises interesting questions of what we expect from our leaders,” wrote? Peter. “They best bring their experience and willingness to engage on difficult issues that don’t lend themselves to answers that can be reduced to quantifiable equations.”

“Policymaking is inherently slow and deliberate because it moves at a human speed that allows for sharing opinions, debating issues, and weighing votes,” he continued.

I agree with Peter – while AI brings enormous potential to better our lives, there are still many unknowns as to how we can use this technology responsibly in lawmaking and good governance. In his words, “AI can be a supplement to, not a substitute for, good leadership.”

Read Peter’s full blog post here .

AI IRL

This week, the Washington Post launched a brand new AI chatbot to help its readers (like me!) ask questions about climate change. The tool, dubbed “Climate Answers,” pulls reader inquiries directly from a wealth of Washington Post reporting on clean energy, climate policy, green technology, and more.?

Sample questions the chatbot offers up include:

How does recycling work?

What is climate change?

Should I get solar panels for my home?

How do rising sea levels affect coastal cities?

Of course, readers can type in their own unique questions for the chatbot to answer.

Ideally, the Post plans to expand the chatbot to answer readers’ questions about all topics, not just climate-related ones. But this is an important step in addressing how AI tools can help elevate accurate information sharing and fact-based reporting.

The ultimate goal? To ensure all answers “can be backed up with our journalism,” said Chief Technology Officer Vineet Khosla.

I had to try the tool out for myself – let me know in the comments if you have, too!?

Final Thoughts?

With the rapid pace at which AI is evolving, I’ve been thinking a lot about how our region’s infrastructure will need to be modernized to best power Silicon Valley’s innovation ecosystem for years to come.?

Several key initiatives – spearheaded right here in the Valley – will be crucial to meeting the demands of this transformative technology.?

First, SB 1298 (Sen. Cortese) holds immense promise in expanding data centers across the Golden State and ensuring that our data markets meet the rising demand for AI tools and systems. Similarly, more data centers will also power the immense range of cloud-based services imperative for the success of our region’s technology-driven sectors.

SVLG continues to be supportive of SB 1298 as the bill sponsor and I see this as vital legislation for our region’s innovation economy.

Second, the proposed BART Silicon Valley Phase II Project is a sizable investment in the Bay Area’s infrastructure — one that helps to ensure that the South Bay remains the beating heart of the innovation ecosystem for years to come.?

I’m proud to have played a role over the past week in helping to lead a regional coalition of businesses and community groups urging leaders in DC to provide federal funding for this important project.??

Modernizing our infrastructure is an unlock for the transformative power of AI and ensures that Silicon Valley + the greater Bay Area will continue to be the global hub for technology and innovation.?

I look forward to continuing this important work with our federal, state, and local partners.

Like this newsletter?? Leave a comment, connect with me on LinkedIn, and subscribe to receive upcoming editions.? Thank you!