AI Race - Winners & Losers

The AI market is projected to reach $2 trillion by 2030, with a CAGR of 38%. The current market leaders include Microsoft, Google, Amazon, Apple, Nvidia, IBM, Intel, and Baidu.

Following the tremendous success of OpenAI/ChatGPT last quarter, AI market leaders and venture capitalists have accelerated market activity, and the AI innovation race is on. We can witness the high-stakes game being played by major corporations and venture capitalists.

Here are a few significant milestones:

• In Q1 2023, Venture Capitalists invested more than $1.6B in generative AI startups.
• In Jan 2023, Microsoft invested an additional $10B in ChatGPT. This investment will help bring AI to Microsoft products and effectively compete against Google.
• In Feb 2023, Google announced Bard, an experimental conversational AI powered by LaMDA in response to ChatGPT
• In April 2023, Meta released Large Language Model Meta AI (LLaMA), a state-of-the-art open-source chatbot
• In May 2023, Meta released ImageBind: A Holistic AI learning across six modalities
• In May 2023, ChatGPT has 1.6 billion users?
• In May 2023, Amazon announced 'Bedrock' AI platform to take on OpenAI

With over $10B in investment, 1.6B+ users, 400K+ open-source AI developers, and 10K+ startups rapidly innovating and consuming AI in 2023, AI innovation has become cheaper and faster with open-source community involvement. Developers have flocked to ChatGPT to build new apps, improve models with LLaMA, and now ImageBind.

The progress is staggering with the new open-source AI tools and larger community involvement. Within a few days after LLaMA was released, a developer made the AI run on a phone, and personalized AI was fine-tuned on a developer’s laptop in an evening.?

The bottom line is that the AI race is on, primarily between the existing AI and chip maker market leaders, who want to defend or create new MOATs to capture the $2T+ market opportunity. They have recently accelerated their investments and are seeking "free" open-source community help to accelerate their progress. To win the race, market leaders will deploy various tactics, including partnerships, acquisitions, IP defense, talent wars, and more.?

The US might lead the way in AI, but China is not far behind and doesn’t have to worry about privacy, regulations, etc. China is set to double AI spending to $27B by 2026. United Kingdom, Germany, Canada, Japan, and Korea are making significant strides. As per Brookings Institute, developing countries will have a significant disadvantage in the AI arms race and risk losing their competitive advantage: abundant, low-cost labor.??

In the next five years, we will witness an AI race with huge ramifications across nations, industries, enterprises, and consumers globally. The winners will primarily be large AI and chipmaker corporations, venture capitalists, and developed nation-states in this race. The losers will be many human-intensive industries, poor nation-states, and billions of global consumers who will lose privacy, jobs, and peace.