The global AI market is projected to reach $190.61 billion by 2025, with an estimated 8.4 billion AI-powered digital assistants expected to exist by 2024, surpassing the global population. The pace of advancement in AI is fascinating yet challenging to keep up with.
The annual MAD (Machine Learning, Artificial Intelligence, and Data) landscape serves as Matt Turck's endeavour to comprehend this dynamic field. Its philosophy is to share the work and engage in discussions with the community. This year's edition was co-authored by Katie Mills, Kevin Zhang, and Paolo Campos.
In recent months, there has been an undeniable and exponential acceleration of Generative AI, leading to the formation of a new mini-bubble. The impact of AI has extended beyond just technological progress and has become a mainstream phenomenon, with non-technical individuals worldwide experiencing its power firsthand.
The rise of data, machine learning, and AI is one of the most significant trends in our generation, with far-reaching implications beyond technical domains. Its impact on society, politics, geopolitics, and ethics is profound.
Its impact on our industry will be huge, with phrases such as AI marketing, AI sales, and AI content becoming natural parts of our daily vocabulary this year and last.
Interested in hearing more? Then head on over to our free AI-Driven Growth Best Practice Guide. In this report, we explore the growth and evolution of AI, examining some of its potential uses, especially in marketing, sales, and customer experience.
So, let's jump in.
The 2023 MAD (Machine Learning, Artificial Intelligence, and Data) landscape is facing a new economic era where capital has become scarce and expensive. As a result, companies in this space have had to shift their focus from growth at all costs to controlling their expenses. Layoff announcements have become a common occurrence, as many companies on the 2023 MAD landscape have had to reduce their workforce.
However, despite the challenges, the market demand for software products in this space has started to adjust to the new reality. As a result, many previously hidden or deprioritised issues have now emerged in full force, and everyone is paying more attention. Venture capitalists on boards are less focused on chasing the next shiny object and more concerned with protecting their existing portfolios.
The financing markets have been largely shut down in 2022, affecting both public and private markets, and the trend is expected to continue into 2023.
The market conditions have led to a situation where only companies with sustained growth and favourable cash flow dynamics will be separated from companies that have relied heavily on capital. The IPO window has been closed, with no clear indication of when it will reopen. The overall IPO proceeds have decreased by 94% from 2021, while IPO volume has declined by 78% in 2022.
Despite the general downturn in the market, Generative AI has emerged as a bright spot in the tech industry. Due to its potential to bring about a major shift in the technology landscape, VCs have been investing aggressively in the space.
Several AGI-type companies have raised over $100 million in their first rounds of financing, with founders from research labs like OpenAI, Deepmind, Google Brain, and Facebook AI Research attracting significant investments. Notably, OpenAI received a $10 billion investment from Microsoft in January 2023, while other AI-powered platforms like Runway ML, ImagenAI, and Descript have also raised substantial amounts of financing.
The release of Open's AI conversational bot, ChatGPT, on November 30, 2022, marked a significant moment in the mainstreaming of AI. ChatGPT, which has the ability to mimic human conversation, quickly became one of the fastest-growing products ever. Its release based on GPT 3.5 signifies that AI has become a significant aspect of collective consciousness.
OpenAI has played a significant role in advancing AI image generation technology. In early 2021, it released CLIP, an open-source, multimodal, zero-shot model.
The model can predict the most relevant text description for an image given its text descriptions, without optimizing for any specific task. OpenAI also launched DALL-E, an AI system that can generate realistic images and art from natural language descriptions.
Its second version, DALL-E 2, was released publicly in September 2022. In the same month, OpenAI released Whisper, an automatic speech recognition (ASR) system capable of transcribing and translating multiple languages into English. MetaAI also released Make-A-Video, an AI system that generates videos from text in September 2022.
The immense power of generative AI has led to several concerns, including fears that it will replace human jobs.
However, it is more likely that we will move towards a co-working model where AI models work alongside humans as "pair programmers" or "pair artists." There is already a marketplace for selling high-quality text prompts called Promptbase.
There has been some misuse of Generative AI, including the creation of an NSFW porn generator, Unstable Diffusion, which was shut down on Kickstarter. Additionally, some organizations have banned ChatGPT, and Microsoft/GitHub is facing a lawsuit for alleged IP violation when training CoPilot, accused of killing open source communities.
Finally, there are also allegations of exploitation of Kenyan workers involved in the data labelling process.
This year's landscape features a total of 1,416 logos, compared to 139 in the first version from 2012. The focus this year is on featuring more very young startups, including those in new areas like Generative AI.
The report states that when IPOs become possible again, the biggest private companies will need to go out first to open the market. Databricks, which raised at high valuations and has an ARR of over $1B, is a likely candidate. While the company is reportedly preparing for a potential listing, CEO Ali Ghodsi has expressed no particular urgency to go public.
The 2021 Machine Learning, AI and Data (MAD) Landscape report by Matt Turck provides a comprehensive overview of the current state of the industry and highlights several key takeaways:
Key trends in the data infrastructure market for 2023 suggest a crowded and competitive landscape, particularly as customers face increasing budget pressure and CFO control. While data and AI remain a priority for many businesses, they must now do more with less and are therefore more likely to choose established vendors that offer tightly integrated suites of products that "just work."
As the market becomes increasingly Darwinian, the most successful companies will find ways to grow and expand their offerings from a single feature to a comprehensive platform. This growth will require deepening their customer relationships, particularly as the market faces pressure to rationalize and streamline costs.
Over the last few years, the "Modern Data Stack" (MDS) has been a hallmark of the data infrastructure market, providing a growing and cooperative world of possibilities for businesses. However, recent changes to the market suggest that the MDS may be under pressure as businesses seek to control costs and rationalize their approach to data infrastructure.
Despite the challenges facing the data infrastructure market in 2023, there are still many opportunities for businesses to succeed. This includes vertical-specific or task-specific companies that intelligently leverage Generative AI, AI-first companies that develop their own models for non-generative tasks, and LLM-Ops companies that provide the necessary infrastructure to support these solutions. By focusing on these areas of opportunity, businesses can stay ahead of the competition and thrive in the evolving data infrastructure market.