Following last year, interest in corporations engaged in generative artificial intelligence (AI) is expected to continue this year. However, as more and more enter the generative AI business, the market is forecasted to reach saturation. Consequently, small and medium-sized corporations and startups that fall behind in competition are anticipated to face a crisis due to increased expense burdens for expanding into new businesses.
According to IT media TechCrunch on the 6th, the amount invested by the global venture capital (VC) industry in generative AI corporations last year totaled $56 billion (about 82.34 trillion won), with a total of 885 transactions recorded. This marks an increase of 192% and 29%, respectively, compared to the investment amount of $29.1 billion (42.79 trillion won) and transaction number of 691 in 2023.
Notably, the investment amount reached $31.1 billion (45.73 trillion won) in the fourth quarter of last year alone. During this period, Databricks in the U.S. secured $10 billion (14.70 trillion won) in Series J investment, while Elon Musk's xAI received $6 billion (8.82 trillion won) in Series C funding. Additionally, Anthropic secured a strategic investment of $4 billion (5.88 trillion won) from Amazon, and OpenAI also received $6.6 billion (9.70 trillion won) in investment.
Ali Javaheri, a researcher at the financial data analysis firm PitchBook, noted, "Large corporations are continuously attracting massive capital and launching competitive new products, showing no signs of slowing down in funding for the generative AI industry."
However, investment in generative AI startups last year was only $6.2 billion (9.12 trillion won), accounting for just 10.71% of total investment. Only a few corporations that attract global attention succeeded in securing funding. Startups like China's Moonshot AI ($1 billion), France's Mistral ($640 million), Germany's DeepL ($300 million), China's Minimax ($600 million), and Japan's Sakana AI (about $214 million) managed to attract investment.
The industry sees this year as a year of 'picking the wheat from the chaff' among generative AI startups. For instance, companies developing AI coding assistance tools or AI-based media startups are expected to be eliminated if they fail to establish new business models. Research Institute Javaheri stated, "Only startups that receive the most substantial funding can maintain the pace necessary for the most innovative models."
In contrast, investment in companies operating generative AI infrastructure is expected to continue. Generative AI infrastructure refers to the services that provide the foundational technologies and systems necessary to operate generative AI technologies and applications, such as data centers or cloud services. Microsoft plans to invest up to $80 billion (118 trillion won) in AI data centers during the 2025 fiscal year (from July last year to June this year). Amazon is also known to be pouring at least $80 billion into AI facility investments this year.
An IT industry official said, "Ultimately, the generative AI business is a battle of capital. It requires massive expenses to maintain competitiveness. It is difficult to sustain infrastructure businesses without external investment."