AI: The Promise & Staggering Costs

Recent reports have shed light on the astronomical costs involved in operating large language models like OpenAI's ChatGPT. According to an analysis by Dylan Patel, chief analyst at SemiAnalysis, ChatGPT could cost OpenAI up to $700,000 per day to run. This is primarily due to the massive computing power required to generate responses to user prompts, with the majority of this expense attributed to the expensive servers needed to power the model. The operational or inference costs of running ChatGPT far exceed the initial training costs every week.

While the training costs for ChatGPT's language models are estimated to be in the tens of millions, the ongoing costs to deploy the model at scale are staggering. Companies using OpenAI's language models have faced steep operational costs for years. For example, the CEO of Latitude, a startup using OpenAI's models for an AI dungeon game, reported spending $200,000 per month on the model and AWS servers in 2021 to answer millions of user queries. To reduce costs, Latitude switched to a less expensive language model provider. To address the high costs of running generative AI models, Microsoft is reportedly developing an AI chip called Athena, which aims to find cheaper alternatives to Nvidia's expensive graphics processing units (GPUs) . The project, which started in 2019, has over 300 Microsoft employees working on it, with a potential release for internal use by Microsoft and OpenAI as early as next year.

The high costs of running large language models have also led to concerns about the sustainability and accessibility of these technologies. As the demand for AI-powered applications continues to grow, the need for more cost-effective solutions becomes increasingly pressing. Experts warn that the current cost structure could limit the widespread adoption of these transformative technologies, potentially widening the digital divide and excluding smaller organizations and individuals from accessing the benefits of AI.

Sequoia Capital Doubles Down on AI Despite Rising Costs

As covered by the great folks at HomeScreen: Despite the challenges posed by rising costs, Sequoia Capital, one of the most renowned venture capital firms, is doubling down on its investment in AI. At their recent AI Ascent 2024 event, Sequoia laid out its vision for the transformative impact of AI in the years ahead.

Sequoia's Pat Grady made a statement, suggesting that we may be standing at the "precipice of the single greatest value creation opportunity mankind has ever known." Drawing parallels to game-changing tech waves like mobile and cloud computing, Sequoia sees generative AI riding a similar meteoric trajectory.

The numbers presented by Sequoia are staggering – AI startups have already made $3 BILLION in their first year, massively outpacing the early growth of SaaS companies, which took 10 years to reach similar revenue levels. However, Sequoia believes this is just the beginning.

Sequoia envisions a future where entire companies function as hyper-optimized intelligent networks, with collaborative AI assistants seamlessly working behind the scenes to continuously enhance processes like engineering, product personalization, and customer support. They even raised the possibility of ultra-powerful "one-person companies" taking on challenges that currently require armies of humans.

Challenges Ahead

Sequoia acknowledges that there are still significant hurdles to overcome, including bridging the gap between AI's magical demos and real-world underperformance, as well as the astronomical computing costs that still dwarf revenues. However, the firm remains undeterred, doubling down on its investment in AI and its belief in the transformative potential of this technology.

This week startups attracted over $200 Million in investments. One interesting deal centers around the application of AI in the “real world”.

Early Stage:

• Juicer: Raised $5.3 million in seed funding for its restaurant revenue management and pricing solutions, revolutionizing the hospitality industry.

• Archetype AI: Secured $13 million in seed funding for its development of foundation models for physical-world AI, promising advancements in AI technology.

Growth Stage:

• Sprinto: Raised $20 million in funding for its automated risk and compliance solutions, streamlining processes for businesses.

• Windfall Bio: Secured $28 million in Series A funding for its methane capture and transformation technology, addressing environmental challenges with innovative solutions.

• Anrok: Secured $30 million in Series B funding for its sales tax compliance software, facilitating seamless compliance for businesses.

• Symbolica: Raised $33 million for its foundation models, driving advancements in AI development.

  Although deal volume was slower this week, AI remains in the spotlight. As more deals unfold in the valley, it's evident that this year is still shaping up to be dominated by AI.

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Their methodology includes in-depth initial analysis, advanced unit testing with frameworks like Chai/Waffle and Hardhat, and robust penetration testing to simulate real-world attacks. This is complemented by static and dynamic analyses using tools such as Echidna and MythX, ensuring a thorough evaluation and resilience against potential threats.

Looking to the future, REV3AL is expanding its services to cover emerging blockchain technologies and smart contract types, continuously adapting to the evolving landscape.

Discover more about REV3AL’s commitment to transforming blockchain security and stay updated on their latest advancements by visiting their website at www.rev3al.com. Here, innovation meets meticulous security to protect and advance the decentralized future.

AI INFRA: Building the Future, Not Just the Hype

Silicon Valley thrives on flexibility. We've always favored a multi-vendor “Best of Breed” approach, picking the best tools at each layer for optimal performance and freedom of choice. This is even more critical in the age of AI, where there is massive amounts of investments pouring into the Bay Area to fuel this revolution.

The AI Infrastructure Summit addressed this crucial topic. We explored the various infrastructure options, from on-premise setups to cloud-based GPU solutions. With countless ways to build and deploy AI infrastructure, we highlighted some leading approaches to help you navigate this complex landscape.

AND IT DOESN’T HAVE TO BE BORING

It was a vibrant event filled with an engaging lunch, lively discussions, and an inspiring atmosphere. Our musical guests kicked off the programming by jamming out the soundtrack of AI. IT WAS 😎, IT WAS 🔥. Videos will be coming out soon, stay tuned!

As our most ambitious Ignite event yet, we have received a lot of feedback that it was a resounding success. We thank everyone who helped make it unforgettable!

Founders & Funders goes Taco Tuesday

WHATS NEXT?

• Startup Grind | Apr23-34

• Founders & Founders | May14

• Path Ahead (To Be Announced)

Join Us in Building Our Community

We have been overwhelmed by the positive feedback received over the past year and are committed to always elevating our events with valuable content and engaging networking opportunities. Our goal is to nurture and grow the community energy and provide an awesome experience for all attendees. Sponsors play a crucial role in making these events possible, so if you know any corporate entities seeking visibility and support opportunities, please encourage them to connect with us.

• Get Involved

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Head of Content // Team Ignite