Since the end of last year, artificial intelligence has become a fundamental piece in the innovation and development of Brazilian startups. Although ChatGPT has recently stood out, the presence of startups dedicated to artificial intelligence in Brazil is already a consolidated reality.
According to the “Report Panorama Emerging Tech in Brazil,” conducted by Distrito, Brazilian startups are at the forefront of emerging technologies such as edge computing, blockchain, simulated reality, genomics, and regenerative agriculture. Among these, artificial intelligence startups represent more than 20%, with 111 startups mapped.
The Reign of Artificial Intelligence in Market Evaluations
In a scenario of scarce investments in startups, those adopting artificial intelligence have stood out. Investors now dedicate a significant portion of their time to evaluating startups exploring the potential of generative artificial intelligence.
According to Pitchbook data, pre-money valuation averages for early rounds of generative AI companies increased by an impressive 16% in 2023. In contrast, valuations for other startups seeking investments in Series A or Series B rounds decreased by about 24%.
Some generative AI startups, even without established revenue, manage to raise investment rounds with valuations around $250 million. The dominance of artificial intelligence, therefore, becomes crucial to attract investors and maintain market valuation.
Be inspired by these success stories of AI use
The startups listed in the Scape Report Martech & Adtech 2023 are also at the forefront of developing AI technologies that drive business.
Rain: an AI-powered assistant that uses natural language processing to understand business challenges and suggest creative solutions for critical decisions. An AI that accelerates and empowers operations in advertising, marketing, and communication.
Iara Digital: a leader in conversational AI in Brazil, redefines interactions between humans and machines with innovation and customer focus. Specialized in developing conversational interfaces using advanced generative AI, such as Iara Chat, it offers user-centric experiences in various sectors.
Alternatives in artificial intelligence continue to expand, becoming increasingly refined. The outlook is that these technologies and their branches will become fundamental elements for various activities, materializing in software with the ability to perform day-to-day tasks.
BCG Alert: Master or Perish in the AI Era
Recently, the Boston Consulting Group (BCG) released a report emphasizing the importance of mastering artificial intelligence to ensure survival and innovation in business. According to the study, it is no longer a question of whether AI will have an impact but to what extent companies are using it to generate real commercial value.
However, the report warns of challenges associated with the indiscriminate adoption of generative AI. The excitement around large language models, such as ChatGPT, can lead to a simplistic view. Successful applications of AI have existed for a long time, fueling robust business models.
Additionally, it is crucial to recognize the limitations of generative AI, such as a lack of understanding of cause and effect, the inability to understand metaphors, and the risks of bias in data. Success in implementing AI requires a balanced approach, considering its capabilities and limitations.
Regulation of Artificial Intelligence: Challenges for Startups
The European Union is at the forefront of regulating artificial intelligence with the proposed AI Act. This regulation can significantly impact startups, becoming an obstacle due to high bureaucratic costs and rigorous requirements.
The recent ban on ChatGPT in Italy, based on copyright rules and GDPR, highlights the growing concern about regulation. The EU requires any AI wishing to enter its territory to undergo an expensive and bureaucratic approval process. This can make it challenging for startups, especially those without resources to face these challenges.
Incorporating AI into Startups: Between Trend and Reality
Artificial intelligence has gone from being a mere trend to becoming a consolidated reality. Sectors such as HR, legal, financial, and marketing can benefit from the advantages of AI, estimated to reach $459.3 billion by 2030, according to the Market Report.
However, it is essential to distinguish between the effective integration of AI and excessive dependence on this tool in business processes. The challenge is to find the right balance, leveraging the opportunities that AI offers without exaggeration.
How to Incorporate Artificial Intelligence into Startups: Practical Tips
For startups looking to leverage the advantages of AI, it is crucial to start gradually. Identifying specific demands that can be addressed with AI and choosing the appropriate technology are initial steps.
AI is not a one-size-fits-all solution to all business problems, and it is crucial to examine specific cases. Furthermore, preparing the workforce to adopt AI is essential, involving more team members in the process.
In summary, the efficient use of artificial intelligence requires a deep understanding of the specific needs of the startup. Testing, adjusting expectations, and involving the team are crucial steps to ensure success in implementing AI.
By exploring the possibilities offered by artificial intelligence, startups can not only accelerate their growth but also become more attractive to investors in a constantly evolving technological landscape.
If you own a startup and are looking for investment or want to invest in one, get to know Pipeline Capital Tech | Investment Group.