CB Insights

GenAI is bringing the metaverse back from the dead. Meta, Google, and even OpenAI have all entered the AI hardware race, which could bring AR/VR devices such as smart glasses to the masses. The beginning of the end for the iPhone era? We’ve heard that before. It was called the metaverse and peaked in 2022 (see the market map below). Or did it? The NASDAQ CB Insights Metaverse US index is up 27% this year: https://cbi.team/4h0ygai It’s even it’s outperforming the S&P 500. This index was created using our proprietary data – acquisitions, investments, partnerships, and patents, among others – and scoring model to select public companies working on the various components of the metaverse. Which metaverse tech will make a comeback first?

OpenAI continues to lock in content to enrich ChatGPT. On Tuesday, it announced a partnership with Hearst, a leading newspaper and magazine holding group (including the San Francisco Chronicle, Esquire, Cosmopolitan, etc.). It's the latest in a range of content and product partnerships OpenAI has pursued in the last year.

Nvidia has picked up another startup (at a steep discount): OctoAI (now NVIDIA) OctoAI specialized in optimizing and deploying AI models. NVIDIA bought it for somewhere in the $165M-$250M range, a steep discount from its prior valuation of $900M and a poor outcome for most of its investors (it had raised $132M in funding). Nvidia’s acquisitions show a pattern: the company is looking to make using its pricey chips more cost-effective and efficient. For example, it acquired Run:ai and Deci AI (Acquired by NVIDIA) earlier this year, both of which focus on optimizing AI workloads.

We analyzed 15 of the companies with the largest tech IPOs since 2022 to see whether they’ve gained or lost value since they filed to go public. The majority (10 out of 15) have either held steady or gained value as public players — a positive indicator for tech IPOs more broadly. And AI is an important factor driving gains for several of these companies. For instance, Arm’s value has nearly tripled since debuting (it’s a leader in CPUs for AI computing hardware). Tempus AI is deploying AI across its precision medicine offerings, which has helped buoy its value by 31% since its IPO filing.

The Q3’24 numbers are in and…the venture reset continues. Global venture funding and deals dropped last quarter, falling back to 2016/17 levels. The funding decline was felt across fintech, digital health, retail tech, and even AI. However, amid the decline, AI remained the champ in the venture arena. It pulled 1 out of every 3 VC dollars in Q3’24 — more than any other sector. Explore the evolving VC landscape in our State of Venture Q3’24 Report: https://cbi.team/3TWvdWR

Your next coworker might be a bot. Over 300+ startups have exploded onto the AI agent & copilot scene, as businesses race to tap productivity gains. Agents — or LLM-based bots can tackle complex tasks with minimal human intervention — mark an evolution beyond simple copilots. Where do we see this going? Dynamic marketplaces where specialized AI agents collaborate across platforms, potentially replacing human work at a fraction of the cost. Learn more about AI agent marketplaces and 8 other game-changing technologies in our report: https://cbi.team/4eKLCpL

OpenAI has nearly doubled its valuation (the drama just doesn’t matter). The company closed a $6.6B funding round at a $157B valuation last week. It’s on track for $3.7B in revenue this year. OpenAI’s valuation is now 6.5x its next private competitor — Elon Musk’s xAI. Anthropic, OpenAI’s closest competitor in the LLM developer market, is rumored to be eyeing a $40B valuation. And for more on where OpenAI is headed, check out its recent investment strategy map here: https://cbi.team/3BwLIm2

1/3 of all unicorns have a valuation right at the $1B mark (or close). 85% of these are fake unicorns... ...who will never realize that valuation. These are companies that chased the $1 billion valuation mark because it was: ▪️ A status symbol ▪️ Viewed as a way to recruit great talent ▪️ Easy to get But the fundamentals of these businesses never made them worth $1B. Lots of distressed and 🔥 sales about to come to market. Financial sponsors must be lickin' their lips for the bargains to be had. See the full list of unicorns here if you want to identify who is in the 85%: https://cbi.team/3Y6Zbtn

The most influential strategy teams have clear KPIs. That’s part of the reason why they outperform the 60% of teams who can’t clearly measure their performance. These winning teams are 50% more likely to sign deals. And they see 67% more of their strategic recommendations implemented. Their secret? Project-specific KPIs. But there’s more to it. Do you want to know what else the most influential strategy teams do better? Find out in our free strategy team playbooks report: https://cbi.team/3zGQ5dI

Legal AI agents either need to innovate, or position for a quick sale. Because buyers aren’t sold. Agentic AI in legal tech may be garnering hype (and attracting investor $$$), but customers are giving mixed reviews. Differentiation between competitors is low, and most startups are not well integrated into other legal workflow solutions. As the space continues to grow, switching between companies will only get easier. So what's next for legal AI agents and copilots? We see 2 paths: compete on features or angle for acquisition. What do you think startups need to stand out in the AI agent market? And who could be scooped up next?