AI giant AI Fund Andrew Ng, a startup incubator that supports small teams of experts who want to solve critical problems with AI, plans to raise greater than $120 million in its second round of funding.
AND sawing with the SEC shows that the second AI Fund, AI Venture Fund II, has so far raised $69.75 million from 13 partners, leaving about $50 million to invest. PR AI Fund declined to comment.
Ng, a founding father of Google’s deep learning Brain project, a co-founder of Coursera and a recent Amazon board member, 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 start a variety of AI ventures, including DeepLearning.ai course and Landing AI, a startup developing AI tools for manufacturing corporations.
Ng launched the $175 million AI Fund in 2018, serving as the incubator’s CEO and leading its direction. (He is listed in the SEC filing as a “general partner managing member” of AI Venture Fund II). The idea was to provide funding at the seed and Series A stages of the company’s lifecycle, allowing teams to work in relative secrecy until they were ready – and connecting them with Ng’s extensive network of specialists.
Greylock Partners, New Enterprise Associates, Sequoia Capital and SoftBank Group were among the first backers of the AI fund. Crunch Base letters 38 portfolio corporations, including AI commentary platform WhyLabs, proprietary Ng Landing AI platform and AI app development tool Baseten.
At $120 million, AI Venture Fund II can be much smaller than the first tranche of the AI Fund. Still, it’s greater than double Ng’s supposedly originally hoped to raise – $50 million – for follow-up efforts as a part of the AI Fund.
Take this as another potential sign that the AI bubble – especially the generative AI segment inside it – could also be shrinking.
PitchBook recently reported that early-stage generative AI deals have declined for two consecutive quarters, losing 76% from a peak reached in Q3 2023. Pre-seed and seed VC deal value declined in Q1 2024 to $122.9 million, compared with a Q3 peak of $517.7 million.
Business reluctance could also be to blame.
In two recent surveys by Boston Consulting Group, about half of respondents—all senior executives—said they didn’t expect generative AI to deliver significant productivity gains and that they frightened about the potential for bugs and data breaches that might result from generative AI tools. As my colleague Ron Miller wrote last week, corporations are finding that generative AI is harder to implement at scale than once thought, and executives are wary.