‘Let 1,000 Flowers Bloom’: A.I. Funding Frenzy Escalates

The blooming flowers include Dust, a start-up founded by former employees of OpenAI. Dust is nearing a $5 million funding round led by Sequoia Capital that will value it at $30 million to $40 million, two people with knowledge of the situation said. The round was competitive, with term sheets offering values ​​as high as twice that, one of the people said.

Perplexity AI, a start-up created by former employees of OpenAI, Google and Meta, is raising $20 million to $25 million, led by NEA, that values ​​the company at about $150 million, two people familiar with the situation said. And LangChain, a start-up working on software that helps other companies incorporate AI into their products, has raised funding from Benchmark, a person with knowledge of the matter said.

Those follow the $13 billion that OpenAI raised from Microsoft, including $10 billion in January, and $300 million raised this year by Anthropic, another AI start-up.

Dust and LangChain declined to comment. Various aspects of the funding rounds were reported earlier by Business Insider, The Information and Newcomer.

At Y Combinator, the start-up incubator, at least 50 of the 218 companies in the current program are working on generative AI, according to a tally taken by Truewind, an AI bookkeeping start-up that is part of the program. Alex Lee, Truewind’s chief executive, said ChatGPT had helped investors, potential customers and potential employees understand the possibilities of the technology.

“Before, you’d go in and say, ‘We’re doing something with AI,’ and it’s hard to picture exactly what that looks like,” Mr. Lee said. “Now, they say, ‘Oh, I’ve played with ChaptGPT, and I can imagine how I could use this in my world.’”