AI Isn’t the Future. It’s Already Changing the Game
AI isn’t the future.
Now that I’ve got your attention, let me clarify. AI is already here. It’s reshaping industries, driving billions of dollars in investments and is a part of our daily lives. From writing professional emails to revolutionizing healthcare, logistics and beyond, AI technology is proving it’s not just another overhyped trend. It’s a game changer.
As a journalist with more than three decades of experience, much of it covering business and venture capital, I’ve seen my share of hyped technologies. In the late 1990s, I reported on online shopping and the dot-com surge. Back then, the media was captivated by the promise of a web-based world.
At the Silicon Valley Business Journal, we were constantly pitched stories about tech companies launching websites. That wasn’t exactly newsworthy, but we dutifully covered every new IPO and profiled audacious founders and investors. I wrote about Super Bowl ads for startups (remember Pets.com?), ambitious marketing blitzes, and eventually, the market crash when the bubble burst.
So how does today’s AI boom compare?
Unlike the frothy optimism of the dot-com era, AI’s growth today is supported by real-world applications. AI investments in 2024 accounted for 46.4% of total venture capital deal value and 28.9% of deal count in the U.S., according to the PitchBook-NVCA Venture Monitor. These numbers reflect a significant increase from the previous year. And 22% of all first-time VC funding in 2024 went to AI startups, an astounding $7 billion through Q3, as noted by a recent National Law Review article.
Big deals dominated the headlines last year. The top five venture-backed deals in Q4 were all for AI companies, including major rounds for OpenAI, Anthropic and xAI. These blockbuster investments illustrate AI’s central role in the venture community, and they also highlight a familiar challenge: the concentration of capital. Just as in the dot-com era, a few players are soaking up much of the funding while smaller startups fight for attention.
Enterprise AI is the real story
For all the hype around ChatGPT and generative AI, the real transformation is happening in enterprise applications. Companies are using AI to optimize supply chains, improve customer service and extract actionable insights from vast datasets. AI is no longer confined to the tech sector. It’s deeply integrated into industries like manufacturing, healthcare and logistics.
Take, for example, Deepseek, a platform leveraging AI to help businesses analyze and act on unstructured data. It’s a great example of how AI today’s zeitgeist. Meanwhile, it’s providing value, solving problems and opening opportunities for companies that adopt it.
JPMorgan’s recent report projects 84% annual growth in enterprise AI spending over the next five years, with U.S. industrials expected to increase automation-related spending by 25% to 30%. AI is becoming a necessity for businesses navigating tight labor markets, rising costs, and efficiency demands.
Covering the dot-com boom year ago taught me that hype often overshadows substance. AI, however, feels more mature. Today’s startups are building on decades of research and delivering solutions with tangible impact.
Still, there are parallels worth noting. The concentration of funding in a few big players raises questions about market sustainability. Can the broad venture industry really support this level of focus on just one sector?
There’s also the matter of specialized AI funds. Over the years, I’ve seen plenty of dedicated venture funds, from everything for cleantech, gaming and social media. Many dedicated funds struggled to live up to their promise. While some AI funds are likely to succeed, history suggests we should temper our expectations.
What’s next?
As we enter 2025, AI seems poised to remain a cornerstone of venture capital investment strategies. Investors are searching for the next transformative technologies, and entrepreneurs are racing to meet that demand. For startups, this year represents a tremendous opportunity and a huge challenge. The competition is fierce, and the stakes are high.
The journalist in me is tempted to find someone willing to predict an imminent AI bubble. It’s an easy quote, and they’re usually right eventually, like a broken clock. But AI feels less like a bubble and more like a shift that’s just beginning.
What do you think? Is AI more than just hype, or are we heading into bubble territory? I’d love to hear your thoughts. Share your perspective in the comments or send me a message.
And if you’re working on AI-related projects or looking to sharpen your storytelling around it, let’s connect. I help startups and investors stand out with content and strategies. Reach out. I’m happy to collaborate!
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