Investors are beginning to adopt a new valuation method for tech companies – their AI proficiency. This is due in part to the current wave of AI hype, which has resulted in a struggle among tech titans to create or invest in intelligent computing services. At the same time, startups are leveraging new and improved AI toolsets to develop and improve their products, enabling them to grow quickly and expand into new markets.
TechCrunch has primarily focused on the startup side of this trend, but Copy.ai, which has reached $10 million in annual recurring revenue by leveraging tools like GPT-3, is just one example of the impact of AI proficiency on company valuations.
The valuation method that investors are applying is founded on the ability of a company to effectively deploy AI in their products and services. Companies that excel in this area are considered to have a competitive advantage, potentially leading to higher revenue streams and a greater edge over competitors.
Investors are also looking for startups with AI-powered products that can be scaled easily, further boosting potential revenue streams. But despite the potential advantages of AI proficiency, there are concerns that this valuation method could lead to inflated valuations and disappointing results down the line.
It is important to note that while tech giants have an advantage in developing their own AI technologies, startups can still compete effectively by finding ways to leverage existing AI toolsets. Copy.ai is a prime example of this, demonstrating that AI-powered products can compete and succeed in the market.
Ultimately, investors will need to apply caution and scrutiny when evaluating companies based on their AI proficiency. But regardless of the risks, it is clear that AI-powered products and services will play a critical role in the future of tech startups and their valuations.
