85% of AI start-ups will fail within 3 years.

[adzino]

Yeah, it's likely we might see a huge percentage of AI startups failing within the first few years. Many are riding on the hype wave started by OpenAI, pitching crazy innovative ideas and concepts to attract investment. Investors are game too, hoping for a big payout if just at least one of the ventures ends up being successful. But every hype eventually comes to an end. Once the AI hype cools down, many of these startups may find themselves struggling. Some might survive. At least those that has some real use case. But yeah, it's kinda like the dot com bubble all over again like you said.

[Renampun]

This is an opinion piece. 85% of AI start-ups will fail within 3 years. Link to article. That's what they have said. But what do we think. We use the internet everyday and may even be using one or two AI tools to help us become organized, productive and efficient. Hundreds of AI start-ups are spring up everywhere everyday - while some are jumping in without due diligence some, some are doing it for the money while some others what to make an impact. The AI startups boom is compared to the dot-com bubble where a lot of them failed. Some AI start-ups are: Open AI, Frame AI, Jasper, Drafter AI, Smartly.ai.
What do you think, are we experiencing an AI startup boom like the dot-com bubble? And do you think that 85% of them will fail within 3 years?

that's what they say "survival of the fittest" only startups that are financially strong and innovative can only survive to become the choice of the world's users. because to be honest, most of these new AI startups offer ideas and technologies that are not much different from one another, only a few really put innovation into their technology, the rest just follow the trend.

even the AI company developed by Google namely Bard seems to be mediocre and it won't be used by many people because what they offer is not much better compared to Open AI. especially AI companies from unknown developers, it seems that sooner or later they will close because they cannot attract the market's interest to use their services because they are not innovative and seem ordinary.

[Unbunplease]

Yeah, it's likely we might see a huge percentage of AI startups failing within the first few years. Many are riding on the hype wave started by OpenAI, pitching crazy innovative ideas and concepts to attract investment. Investors are game too, hoping for a big payout if just at least one of the ventures ends up being successful. But every hype eventually comes to an end. Once the AI hype cools down, many of these startups may find themselves struggling. Some might survive. At least those that has some real use case. But yeah, it's kinda like the dot com bubble all over again like you said.

And are these AI startups really needed. Yes, there's a lot of hype going on right now. But then most people will play with it and forget about it. In fact, artificial intelligence capabilities are not needed by everyone. So there won't be many projects left - just a drop in demand. Most projects introduce paid features - and people, for the most part, like free

[southerngentuk]

This, in my opinion, is not surprising because AI has only really gained attention in recent years. Anyway, the first period is very difficult because it has not yet been maximized. Companies try to race with each other to launch prototypes; how can they meet the needs of users? The core is still identity because, anyway, we users mostly care about how good the experience is or not. Everything takes time to develop, and AI is no exception. A technology that wants to be truly breakthrough needs to do better every day. Let the future tell whether AI will really leapfrog human technology.

[alastantiger]

If this statement holds true, the enduring companies would be those that possess genuine and robust business models, rather than relying on investors who simply pour money in with the aim of making profits. While we are familiar with or aware of numerous prominent AI start-ups, there are countless others that never even had the chance to materialize. Some of these start-ups faced the unfortunate situation where their founders raised funds, only to squander the money on luxurious cars or extravagant vacations, leaving the start-up to perish. Thus, I disagree with the notion that we are currently in an AI start-up bubble.

[tiCeR]

If this statement holds true, the enduring companies would be those that possess genuine and robust business models, rather than relying on investors who simply pour money in with the aim of making profits. While we are familiar with or aware of numerous prominent AI start-ups, there are countless others that never even had the chance to materialize. Some of these start-ups faced the unfortunate situation where their founders raised funds, only to squander the money on luxurious cars or extravagant vacations, leaving the start-up to perish. Thus, I disagree with the notion that we are currently in an AI start-up bubble.

Investors with the aim of making profit are the people who made the capitalistic world work and develop. I am not giving my opinion here on whether or not I like capitalism, but without capital most of the applications and tools and services we use today would have never been possible in the first place. Pouring money into research and development is the key to progress. ChatGPT was co-founded by Elon Musk. Google is funneling massive capital into AI. Almost all of these startups had a head start with venture capital. That is how it works.

[o48o]

A project that can last up to 1 year should be able to continue to grow, a good project certainly has a clear concept and roadmap, the owner must be able to ensure that the roadmap can go according to plan, most projects fail because they don't know the direction and goals so they fail.

That sadly isn't good enough indicator for success.

Startups are funded for years by investors and several of these startups are not able to make profits for years. For example it took Apple 2 years, Google and Intel 3 years, and Facebook/Meta and Ford 5 years to be profitable.

Adoption can take time even if startups are more feet on the ground profit centered. And more experimental they are, more likely it is hard to find adoption for your product. Especially when startups are cutting edge hi-tech and other infrastructure isn't ready for it yet.

[axxo]

I think it is possible that 85% of AI startups will fail within 3 years. The success rate of startups in any industry is generally low and the field of artificial intelligence is no exception. While AI has a great potential to transform various industries, it is also a complex and rapidly evolving field that requires significant investment and expertise. Many AI startups face challenges such as data privacy concerns, lack of funding, difficulty in finding skilled talent and regulatory hurdles. Additionally, the market for AI products and services can be highly competitive making it difficult for new entrants to gain support. It is important to note that not all AI startups will fail. Some will be successful in developing innovative products and services and address specific industry needs and provide value to customers. Those that can secure funding, build strong partnerships, and attract top talent may have a better chance of success.

[disconnectme]

I think you are being conservative with this figure I will say that more than 90% of these AI startups will fail, and only 1% of them will come out a true winner like Google and Amazon. I believe we are just scratching the surface of this technology and companies that think they stand need to check it unless they will fall. As you can see here Google is playing catch up in the AI space. I prefer to use Chat GPT to Google search or Google AI,  though it is still difficult to say this is the true winner for now but what companies will struggle with is how to make that shift from the known world to the unknown world. We just need to accept it the future is here we just don't see it

[Bananington]

What do you think, are we experiencing an AI startup boom like the dot-com bubble? And do you think that 85% of them will fail within 3 years?

It is difficult to say but artificial intelligence is just becoming popular and logically for any business the pioneers in the business usually have the upper hand. The present AI startups will have the benefit of being the first choice for most people who will become interested in the technology. The present AI startups will continue to grow, and in the next three years, they would have increased in the number of users that they have because of how known AI will be in the next few years to come. The present AI startups will dominate the market.

[Buddyspa]

https://bitcointalk.org/index.php?action=profile;u=3561418;sa=summary

[icalical]

This is kinda true, tho I am not sure about the number of 85% since I never do any research on it, but I think it's about the right number. And it's not only AI, it happened in almost all break-through project. Like DeFi, in the previous trend or even more common industry like Online Transportation like Uber and Grab, there used to be a lot like this project but then only few is thrive and successful. User will slowly move to one project that are truly know what the users need, some industry doesn't even take up to 3 years to eliminate some projects.

[nimogsm]

And now there is a trend and there will be many projects and various startups that will use this tool, and this statistic in 85% is not only for this event, it fits all trends. Especially if we are talking about crypto, then for myself, I have not yet identified a project that would be interesting to me related to AI and crypto.

[Vaskiy]

This is kinda true, tho I am not sure about the number of 85% since I never do any research on it, but it's I think it's about the right number. And it's not only AI, it happened in almost all break-through project. Like DeFi, in the previous trend or even more common industry like Online Transportation like Uber and Grab, there used to be a lot like this project but then only few is thrive and successful. User will slowly move to one project that are truly know what the users need, some industry doesn't even take up to 3 years to eliminate some projects.

It is the reality, just because AI is the ongoing trend companies focus on it. They never think about the real time usage as well as the affordability. Most of the projects initially focus the premium people which means the company is able to generate revenue reaching small number of people whereas it requires large marketing to make it generate revenue reaching the bottom people. When the real-time usage is connected with the common mans involvement the project turns successful.

[WatChe]

This is kinda true, tho I am not sure about the number of 85% since I never do any research on it, but it's I think it's about the right number. And it's not only AI, it happened in almost all break-through project. Like DeFi, in the previous trend or even more common industry like Online Transportation like Uber and Grab, there used to be a lot like this project but then only few is thrive and successful. User will slowly move to one project that are truly know what the users need, some industry doesn't even take up to 3 years to eliminate some projects.

Remember 2007? The year of ICOs. There were countless number of ICOs launched in 2007 and today only handful are known while rest either collapsed or abandoned by the owners. Today its summer of AI and everyone jumping into this sector for making a fortune. Only project that have right vision and team that has necessary skills along with motivation will survive rest all will be history in a matter of time. Its natural thing that whenever something new pops up, people jump into it for making money.

[YUriy1991]

Yeah, it's likely we might see a huge percentage of AI startups failing within the first few years. Many are riding on the hype wave started by OpenAI, pitching crazy innovative ideas and concepts to attract investment. Investors are game too, hoping for a big payout if just at least one of the ventures ends up being successful. But every hype eventually comes to an end. Once the AI hype cools down, many of these startups may find themselves struggling. Some might survive. At least those that has some real use case. But yeah, it's kinda like the dot com bubble all over again like you said.

I do not claim what was said above that it is completely true. But look at where the direction of AI is being created in detail and the products that have been developed and created by AI. indeed, AI provides all its conveniences and is easy for users to use, for example creating an article, creative content whose speed is faster than making a delicious cup of coffee, but that's just the visuals, there's something bigger than that. My current view.

[Kakmakr]

I definitely agree with you on this....

A lot of these startups are diving into the deep end and just riding the hype wave to be hip and to be first to market. It reminds me of the time when "Blockchain" was the buzz word...every startup wanted to have the word "Blockchain" in their project, but most of them failed.

Yes, it is good to be first to market... but it is hard work to sell the "new" concept to customers in the early days. Do not go "all-in" to a new technology, if you are not well funded by other mature operations. 

[AmoreJaz]

I definitely agree with you on this....

A lot of these startups are diving into the deep end and just riding the hype wave to be hip and to be first to market. It reminds me of the time when "Blockchain" was the buzz word...every startup wanted to have the word "Blockchain" in their project, but most of them failed.

Yes, it is good to be first to market... but it is hard work to sell the "new" concept to customers in the early days. Do not go "all-in" to a new technology, if you are not well funded by other mature operations.  

and not only 85% will fail but more than 95% of this type of project. just any other hype that we have seen in this market. we all know that most of them are just riding the hype, having AI connected to their name.
very few devs are serious in attaining success of their product but they are more on how to earn money fast. they usually don't care if their product or service will be a hit or not, useful or not,  in the market. so long their pockets are full.

[YUriy1991]

very few devs are serious in attaining success of their product but they are more on how to earn money fast. they usually don't care if their product or service will be a hit or not, useful or not,  in the market. so long their pockets are full.

Agreed in this context, Besides that the market has its own way or mechanism of filtering out unsustainable or ineffective projects from time to time. Success is not only determined by the early steps as an adopter, but also by the company's ability to continue to grow while maintaining customer relevance and satisfaction. In the end it is the market and customers that determine the success or failure of the startup.

[Vishnu.Reang]

I don't have that much idea what is the main purpose of them but in current situation people is really afraid of loosing their job in market. If they don't have good use of their projects then most probably they will loose their trust and importance. One of the biggest mistake that AI startups make is focusing too much on technology without realizing that business is more important then technology. There is one more problem in AI is insufficient or low-quality data. AI systems function by being trained on set of data relevant to topic they are tackling.