“Breaking Through the Buzz: VC’s Enthusiastic about AI Investment’s Future Beyond 2024”

With so much in the rearview mirror, it’s hard to predict what will happen with AI startups in 2024. But some people, like investors, make their living from shrewd bets, so TechCrunch+ recently asked more than 40 investors what they think AI investing could look like in 2024. Most investors told TechCrunch+ that they expect the current swell of funding to continue but were optimistic that the industry is moving past its initial hype cycle and toward more durable businesses. Lisa Wu, a partner at Norwest Venture Partners, expects opportunities in verticalized AI to be particularly attractive this year. “For example, law firms that effectively leverage AI will be able to offer their services at lower cost, higher efficiency and higher odds of favorable outcomes in litigation.”

In the ever-evolving landscape of technology, perhaps no industry has captured the attention and investment of both individuals and corporations quite like artificial intelligence. And in 2023, AI startups were at the forefront of this frenzy, with endless experimentation and innovation taking place. From record-breaking investments to noteworthy closures and scandals, the year was a rollercoaster ride for all players involved. But as we look ahead to 2024, the burning question remains: what lies ahead for AI startups? To seek out potential answers, we turned to some of the industry’s top investors, who offered their insights and predictions for the coming year.

“Most investors told TechCrunch+ that they expect the current swell of funding to continue, but they were also optimistic that the industry is moving past its initial hype cycle and heading towards more sustainable and impactful businesses,” shared one investor when asked about their outlook for 2024.

This sentiment was echoed by many, with several investors highlighting the potential for a second wave of AI startups that are more targeted and verticalized. These companies, focused on specific industries and sectors, will move away from simply building on top of existing technologies from companies such as OpenAI and Google, and instead offer unique and specialized solutions.

For Lisa Wu, a partner at Norwest Venture Partners, the allure of verticalized AI lies in its potential for lower risk investments. She explains that these startups, armed with deep knowledge of end-user workflows and access to industry-specific training data, will be better equipped to improve efficiency and productivity for their clients. One example she cites is the impact of AI on the legal industry, where she believes that firms that effectively leverage these advancements will see lower costs, higher efficiency, and more favorable outcomes in litigation.

As we peer into the future for AI startups, one thing is certain: the industry will continue to be a hotspot for funding and innovation. And while the exact trajectory and developments remain to be seen, one thing is for sure – the potential for AI to revolutionize various industries and our daily lives is limitless.