Artificial intelligence will undoubtedly change a lot about our world in the long term. But for now, we could also be living through an AI bubble.
Those on the lookout for evidence of this will consult with the news of the $2 billion acquisition of Cognition Labs, as Reported by the The Wall Street Journal on Saturday.
Founded in November, Cognition Labs makes Devine, which it began And this month Describes as “The first fully autonomous AI software engineer.” It doesn’t generate any real income.
Earlier this yr, the startup raised $21 million at a valuation of $350 million. He has since turned down offers value as much as $1 billion. Now, in accordance with JournalIt is in talks with investors for a deal that could possibly be value as much as $2 billion.
This is a staggering figure for a latest enterprise. Yet it isn’t all that surprising in today’s AI space. Perplexity, an AI search startup that challenges Google, was valued at $1 billion a few weeks ago, up from $520 million a few months ago, with Amazon founder Jeff Bezos. Mistral, a French AI startup founded just over a yr ago, hit one. Valued at $2 billion In December.
‘Every bubble has a great story’
Each of these startups can justify their lofty valuations. But as an increasing number of AI projects rake in big bucks from investors hedging their bets, a sense of a bubble grows amongst some observers.
Albert Edwards, chief global strategist at Société Générale, is among the many skeptics.
“Every bubble has a compelling narrative,” he wrote in a note this week. “The current narrative is so focused on expecting AI-driven increases in corporate profits to completely justify current stratospheric valuations. Those of us who lived through the late Nineties. [tech] Bulbul has heard all of it before and turns our eyes to heaven.
As for Devin, “a number of companies are working on some variation of this idea,” enterprise capitalist David Sachs said in a recent statement. Episode of the The All In Podcast. While he likes the enterprise’s “agent-first approach” to constructing latest software projects, “where I believe it gets a lot tougher is once you’re working inside existing codebases. ”, a challenge that other AI startups are addressing.
One advantage with Devin, he added, is that it’s “really demo-friendly.”
Whether those cool demos that wow investors today translate into thriving corporations years down the road stays to be seen, of course. Either way, today’s spectacular valuations for unproven startups will probably be remembered.
Credit : fortune.com
