Sierra Ventures on 5 layers of AI starting investments

Investor Venture at an early stage Sierra Ventures Looking for AI startups that relate to mass pain points, have wealthy data sets and ensure a great improvement in performance.

We recently talked to Tim GuleriManaging partner for 24 years in Sierra Ventures, about what this investment work looks like and its five -layer “layered cake” for AI investments. The company based in San Mateo, California invests from $ 135 million 13 fund, announced in September 2023.

In the current AI start-up era, which show success, they have founding teams with unique perspectives and show a clever application of artificial intelligence and efficient distribution through product growth or orally, said Guleri.

The most evident change in relation to the previous investment cycle is the number of teams implementing a specific idea, said Guleri. This signifies that (*5*)

Possible art

Guleri claims that the cloud era was based on performance, while the era of artificial intelligence concerns innovation.

“Thanks to generative artificial intelligence, there was so much reset and reinforcement of possible art,” said Guleri. “It seems that unlocking from 10 to 100x”.

Artificial intelligence captured the imagination of 16 million to twenty million programmers in the world and it appears that evidently everyone is working on a certain aspect of generative artificial intelligence, said Guleri. “Many of these people move in a hurry to do something in a generative layered AI cake,” he said.

Market size

Global GDP is $ 110 trillionOf which $ 6 trillion comes from agriculture. Guleri believes that generative artificial intelligence will bring huge performance to the remaining 104 trillions of the global economy, which is largely services and industry.

It is estimated that in the very layer of infrastructure AI is a market of $ 50 billion. He said that even if it increased by 25% 12 months -on -year, it is still a fraction of the global GDP, which is half a trillion of dollars.

“It is the wave that raises everything on her,” he said. “There will be a huge amount of value creation in the coming decades.”

Investment Framework of AI layered dough

So where to speculate? Guleri describes the Sierra Ventures approach to AI investment using a layered frame with five clear layers:

1. Infrastructure: This layer – in which Sierra Ventures does not invest – includes fundamental hardware equipment underlying AI. This includes GPU, AI Labs, data centers requiring highly specialized skills and mass capital investments.
2. Applied infrastructure: This applies to specialized AI implementation based on basic models. Sierra invests in this layer, including Cimulata you havewhich goals to enhance e-commerce conversion coefficients by personalized customer search.
3. Horizontal applications: This layer refers to AI-agnostic industry solutions for common business functions. Sierra also invests here, including Eudiawhich goals to cut back the costs of the legal department in large enterprises through artificial intelligence.
4. Vertical applications: These are the implementation of AI specific to the industry. Sierra has invested in vertical use Weav.ai for insurance automation.
5. Innovative innovations: The latter layer refers to completely latest applications and business models possible through artificial intelligence. Sierra sees this layer as the most promise, although it requires the most mental effort. An example of an investment is Revalia BIOBiomedical construction tests on donated human organs, which accelerates research and provides latest data sources.

Guleri said that the company is investing for a place where the markets will probably be in three to 5 years. “We are waiting with the invited breath to open the IPO market,” he said. “I think liquidity will come.”

For now, we “patiently build”.