Another $470M for AI startups, why not?

Top News

• ChatGPT users doubled since last year: As OpenAI stares down a reported $100B valuation, the company has been busy updating the market on its performance, including that there are now 200 million weekly active users of its products — a metric that has doubled since last year. So much for AI proving to be a fad. What’s driving the surge in market demand for what OpenAI is cooking up? Having 92% of the Fortune 500 using your products helps, and CEO Sam Altman said that folks use OpenAI tools “as a part of their daily lives.” That tracks.

• Meta reports big numbers for its AI model: OpenAI isn’t the only big player in the AI world. Meta reports that Llama, its mostly open-source family of AI models, has been downloaded almost 350 million times since its public release last year. Meta and OpenAI are on opposite sides of the open-source AI model debate, but it’s worth keeping in mind that both seem to be succeeding at the same time. That says something about demand depth for AI models in the market today.

• Another $470M for AI startups: Two, to be exact. Codeium just snagged $150 million at a $1.25 billion valuation for its work helping developers sling code; and Magic just closed a whopping $320 million to — surprise! — “generate code and automate a range of software development tasks” according to TechCrunch. Why so much investment into coding assistive services? Because companies hate spending money and developers are expensive. Puckishness aside, there appears to be stronger product-market fit for coding copilots than other AI use cases. Thus far, at least.

AI Coding Copilots Rise Up

I come to you after a marathon push to produce and record TWiST episode 2,000. Get excited—it’s a monster. That work is why your TWiST500 newsletter is so very late today — sorry! — but we can’t not add a few companies to the TWiST500, right?

And what more appropriate names to add than Codeium and Magic. Not every company that raises a massive round is worthy of inclusion; not every late-stage bet is a winning wager. But when it comes to coding helpers, I keep returning to the fact that similar tools from big tech companies are doing crushingly well in financial terms. There are other categories of AI companies with particular focuses that are performing well, like Harvey in the legal space. But it seems that, for now, investors smell the potential for massive, outsized outcomes from the coding assistant space. That’s the precise substance that we are looking for on the TWiST500. So, on they go!

— Alex

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This Week in Startups

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E1997: Sunny and Jason dive into AI demos, exploring AI market trends, consumer adoption, and AI's role in career trajectories. They also discuss the future of AI applications, including ChatGPT's efficiency, AI in operating systems, and the potential misuse of AI in elections.

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