VCs Pour Funds into Untested Generative AI Startups

Venture capitalists are backing start-ups in generative artificial intelligence (AI) systems that can create human-like conversation, imagery, and computer code, despite a lack of clarity about how they will make a profit. Industry analysts predict that venture investment in generative AI companies will easily be several times last year’s level of $4.5 billion. In comparison, such investment totaled $408 million in 2018, when OpenAI released the initial version of the language model powering ChatGPT. The market for AI applications in enterprise technology is estimated to rise to $98 billion in 2026 from almost $43 billion this year.