Are AI startups too easy to copy?

Welcome!

In today's newsletter, we delve into the defensibility of AI startups in a landscape where their ideas can be easily replicated, and how this potentially stimulates industry disruption and growth for smaller players. In sales strategy, IKEA bets big on remote interior design using an AI bot, making it a key part of their goal to increase revenue in this channel to 10% by 2028.

In corporate news, Accenture is investing $3 billion into AI over the next three years, aiming to double their AI talent pool to 80,000 employees. AMD has also made waves, challenging Nvidia's dominance in the AI chip market with their new MI300X "accelerator."

On the tools front, OpenAI has announced several updates to improve their models and API capabilities. Adobe, on the other hand, has introduced the 'Generative Recolor' feature for Adobe Illustrator, a tool that uses text prompts to alter the colors, themes, and fonts of graphics.

In venture capital updates, Rembrand, a startup leveraging generative AI for virtual product placement, secured $8M in seed funding from L'Oreal's VC fund. London-based AI firm Synthesia hit a $1 billion valuation in their recent Series C funding round, backed by Nvidia, among others.

Let’s get slicing into it:

• © Are AI startups too easy to copy?

• 🛋️ IKEA bets on remote interior design as AI changes sales strategy

• 💰 Accenture Is Pouring $3 Billion Into AI

• 🦾 AMD reveals new MI300X A.I. chip to challenge Nvidia's dominance

© Are AI startups too easy to copy?

In the race to capitalize on the AI boom, the low barrier to entry and the ease of replicating AI-based ideas have raised concerns about defensibility and the emergence of smaller, leaner competitors. Some investors, such as James Currier from VC firm NFX, anticipate that AI will significantly transform the tech investment landscape, shifting the role of VCs more towards making investment decisions and winning deals. The AI technology industry is divided into two categories: foundational models, which involve advanced computer science techniques, and application of these models to create new products and businesses. An example of this is OpenAI's DALL-E, which was a pioneering tool but was quickly replicated using open-source technology. Despite the challenges, the ease of AI innovation is expected to benefit consumers and stimulate industry disruption. The article also highlights the potential for smaller players to make significant strides in the field, suggesting that the demand for AI technology is too vast for tech giants like Google and OpenAI to monopolize.

🛋️ IKEA bets on remote interior design as AI changes sales strategy

IKEA is retraining its call centre staff to become interior design advisors as it shifts its focus towards providing more home improvement services and using an AI bot named Billie to handle general customer inquiries. After successful rollouts in parts of Europe, Australia, UAE, and elsewhere, IKEA expanded its interior design services to the UK and US in April, offering a variety of video call consultation packages. As of 2022, sales through IKEA's remote interior design channel made up 3.3% of the company's total revenue, with a goal to increase this to 10% by 2028, in part to attract Gen Z customers. This investment in digital services comes as IKEA is undertaking a €2 billion expansion in the US and follows the trend set by rival Wayfair's 'Digital Design Studio'.

💰 Accenture Is Pouring $3 Billion Into AI

Accenture, the professional services company, recently announced its plan to invest $3 billion over the next three years to assist its customers in expanding their artificial intelligence (AI) practices. The investment aims to broaden its Data & AI practice by providing new industry solutions and pre-built models to clients across 19 industries. To support this initiative, Accenture plans to double its current AI talent pool to 80,000 employees. Alongside this, the company is launching AI Navigator for Enterprise, a generative AI-based platform designed to guide clients through the process of building and utilizing AI in their operations. Paul Daugherty, the group chief executive of Accenture Technology, predicts AI to be a mega-trend over the next decade, transforming industries and companies, and impacting the way we live and work. In the broader context, Accenture joins other consulting companies like PricewaterhouseCoopers and EY in making significant investments in AI. However, this trend of increased adoption of AI comes with concerns about job losses due to AI-powered automation, with estimates suggesting AI could replace up to 300 million full-time jobs globally.

🦾 AMD reveals new MI300X A.I. chip to challenge Nvidia's dominance

AMD has unveiled its most advanced GPU for artificial intelligence, the MI300X, positioning it as a strong competitor to Nvidia, which currently holds over 80% of the AI chip market. The MI300X, termed an "accelerator," could be a game changer if adopted by developers and server manufacturers as a substitute for Nvidia's products. The chip, designed for large language models and advanced AI models, offers up to 192GB of memory, a significant upgrade from Nvidia's H100's 120GB. This increased memory capacity could allow developers to run larger AI models without needing as many GPUs. Additionally, AMD plans to introduce an Infinity Architecture that consolidates eight M1300X accelerators in a single system, a move similar to Nvidia and Google's strategies. Despite not disclosing the MI300X's price, AMD's entry may exert price pressure on Nvidia's GPUs, potentially lowering the cost of implementing generative AI applications. AMD also revealed its own software for its AI chips, known as ROCm, which complements the open ecosystem of models, libraries, frameworks, and tools.

🛠️ AI tools update

OpenAI function calling and other API updates

OpenAI announced several updates including more steerable API models, function calling capabilities, extended context length, and lower prices. Specifically, they introduced new function calling capabilities in the Chat Completions API and more steerable versions of gpt-4 and gpt-3.5-turbo. They also released a 16k context version of gpt-3.5-turbo, and announced cost reductions on their state-of-the-art embeddings model and on input tokens for gpt-3.5-turbo. These updates allow developers to have models intelligently output a JSON object containing arguments to call certain functions, enabling a more reliable connection between GPT's capabilities and external tools or APIs.

Adobe Announces ‘Generative Recolor’ AI Feature For Adobe Illustrator

Adobe has announced the 'Generative Recolor' feature for Adobe Illustrator, an addition to its suite of generative AI tools and models under the Firefly system. The tool, currently available in beta, allows users to alter the colors, themes, and fonts of graphics using text prompts, fostering the creation of varied color palettes and design refreshment. Users can input descriptive prompts like "peaceful pastels," "neon pop," and "fall foliage" to generate color palettes fitting a particular mood or theme. Firefly then uses these inputs to render a scene or theme, extract the color palette, and recolor the user's graphic accordingly. Adobe's Firefly AI model is trained on public domain images and Adobe Stock's 300 million images and videos.

💵 Venture Capital updates

L’Oréal’s VC Fund Is Backing Generative AI Startup Rembrand

Omar Tawakol, a marketing technology entrepreneur known for his previous ventures BlueKai and Voicea, has publicly launched a new startup called Rembrand. Rembrand is a virtual product placement platform that uses generative AI to insert products into creators' videos, providing a new avenue for monetizing influencer and creator content. The startup has recently secured an $8M seed funding round, with notable participation from L'Oreal's venture capital fund.

AI firm Synthesia hits $1 billion valuation in Nvidia-backed Series C

Synthesia, a London-based artificial intelligence (AI) video generation platform, has raised $90 million from investors, achieving a valuation of $1 billion. The funding round was led by venture capital firm Accel and backed by U.S. chipmaker Nvidia, among others. Synthesia plans to use the funds to advance its AI research and development efforts, particularly in creating more expressive and versatile digital avatars. Founded in 2017, Synthesia has developed a proprietary generative AI that enables users to create digital avatars for various applications like corporate presentations and training videos in over 120 different languages.

🫡 Meme of the day

⭐️ Midjourney prompt of the day

Before you go, CB Insights is unveiling the AI 100 – CB Insights’ annual list of the 100 most promising private AI companies in the world on June 20, 2023 2 PM EDT. You can register for the live webinar or recording.