Top US technology giants such as Amazon, Microsoft, Google, Meta, and Apple have deep pockets, enough to spend tens of billions of dollars on AI development and infrastructure. Next on the list are leading companies such as OpenAI, Anthropic, and xAI, which are spending billions of dollars on AI. And there are a few challengers like Mistral and Eleven Labs capable of spending hundreds of millions of dollars. But how long can these challengers keep up? And can they surpass the giants?
Phillippe Botteri, an Accel partner who has led investments in companies such as DocuSign, UiPath, and more recently Snyk and Chainarise, says the race for foundational AI models is just beginning. Smaller start-ups, including some European companies, have yet to emerge from the fray.
“There are some great companies like Mistral, Age, Poolside and Eleven Labs that are a little bit behind the curve in terms of their ability to raise capital,” Bottelli said on today's episode of Equity. “They've raised hundreds of millions of dollars. They haven't raised the billions that OpenAI and Anthropic have raised. But I think that's going to be the next big step for Europe.”
“I think it's a little premature to say the race is over,” he continued.
Mr. Bottelli shared insights on the AI race, the European funding environment, and other stocks. I'd like to share with you a little bit of what else we talked about.
How AI is encroaching on the software market. AI and crowdfunding is predicted to reach $79.2 billion by the end of 2024. Challenges traditional software companies face as non-AI funding growth slows. Why Europe's strong talent pool gives it an edge in the AI race, even as continental European startups struggle to compete with the exorbitant funding of US tech giants. While the IPO market is sluggish, M&A activity is increasing worldwide. Why 2025 will be the year of the “agent revolution” where AI will have a major impact on software development and productivity.
Equity is TechCrunch's flagship podcast, produced by Theresa Loconsolo and posted every Wednesday and Friday.
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