Artificial intelligence Andrew Ng’s AI Fund, a startup incubator that supports small teams of experts who want to solve basic problems using artificial intelligence, plans to raise over $120 million for its second tranche.
ONE archiving with the SEC shows that AI Fund’s second fund, AI Venture Fund II, has so far raised $69.75 million from 13 partners — leaving about $50 million to invest. The AI Fund’s PR declined to comment.
Ng, founder of deep learning program Google Brain, co-founder of Coursera and recent Amazon board appointee, was one of the most recognizable names in the AI community when he became Baidu’s chief scientist in 2014. He left Baidu in 2017 to launch a range of AI ventures including Deeplearning.ai course and Landing AI, a startup developing artificial intelligence tools targeting manufacturing companies.
Ng launched the AI Fund in 2018 with $175 million, serving as the incubator’s CEO and guiding its direction. (In the aforementioned SEC filing, he is listed as the “managing member of the general partner” for AI Venture Fund II.) The idea was to provide funding at the seed and Series A stages of a company’s life cycle, allowing teams to work on relevant stealth until they are ready — and connecting them to Ng’s extensive professional network.
Greylock Partners, New Enterprise Associates, Sequoia Capital and SoftBank Group were among the initial backers of the AI Fund. Crunchbase arena 38 portfolio companies, including AI observability platform WhyLabs, Ng’s Landing AI and AI app builder Baseten.
At $120 million, the AI Venture Fund II would be significantly smaller than the first tranche of the AI Fund. However, it is more than twice that of Ng According to reports he originally hoped to raise—$50 million—for a follow-up to the AI Fund.
Take this as another possible sign that the AI bubble — particularly the busy AI manufacturing segment within it — may be deflating.
Pitchbook recently mentionted that, for two consecutive quarters, AI deals with early-stage production capacity have declined, plummeting 76% from their Q3 2023 peak. VC deal value for pre- and early-stage deals has declined in Q1 2024 to $122.9 million, from a Q3 high of $517.7 million.
Business reluctance could be to blame.
In a pair of recent surveys by the Boston Consulting Group, about half of respondents — all C-suite executives — said they don’t expect genetic AI to deliver significant productivity gains and are concerned about the potential for errors and compromised data. derived from artificial intelligence generation tools. As my colleague Ron Miller wrote last week, businesses are finding that productive AI is harder to implement at scale than once thought — and executives are wary.
