Why trust Greenbot
The meteoric rise of Black Myth: Wukong as the current world’s fastest-selling video game and how this phenomenon echoes the rapid success of OpenAI’s ChatGPT offers a compelling case for how venture capitalists (VC) should invest in artificial intelligence (AI) startups.
Developed by Game Science with support from Chinese tech company Tencent and Hero Interactive Entertainment, Black Myth: Wukong set a new record after selling more than 10 million copies within three days of its launch. This extreme demand brings to mind ChatGPT’s instant popularity in 2022, racking up 1 million users in just five days.
As India expects around 100 AI unicorn startups in the next ten years, these success stories illustrate what investing in emerging AI companies means.
Patience is indeed a virtue
Beyond impressive statistics and sales, game companies and AI startups share similar development journeys that emphasize the value of patient capital.
While Game Science was founded in 2014 by seven Tencent alums, it took five years for Black Myth: Wukong to be perfected. Between these years, the company relied on smaller mobile games to finance the triple-A project.
However, the revenues from these mobile games were not enough to develop high-quality console games. Investments were necessary—and that was what Tencent and Hero Interactive Entertainment brought to the table. Tencent bought a 5% minority stake in Game Science and said it would not influence operations but only offer technical support. Hero Interactive Entertainment also initially acquired a 20% stake.
Early signs of success for the game came when the developer released the first trailer, attracting over 10,000 talents from different gaming businesses across the globe who were willing to move to China for the job. Game Science eventually ballooned from 13 to 140 employees—and later produced the most successful video game not just in China but also worldwide.
Trust and Time: Secrets to AI startup success
The lesson from Wukong’s story is clear. Success requires patient capital or long-term investments from VCs who are willing to trust and stick with startups through their development stages. Just like how Tencent’s support was limited to technical support, AI investors should provide financial backing while respecting the vision and autonomy of the startup.
Speciale Invest partner Arjun Rao shares a similar tactic, saying that investing in research and development startups, whether AI or gaming, requires patience. He added, “Founders do not need to worry about the current downturn and keep a long-term mindset.”
Microsoft also applied this strategy when backing OpenAI, which began working with GPT-3 in 2020. Although the AI giant did not generate profit for the earlier tech, Microsoft has stayed with the company until today and is celebrating its recent wins.
Nevertheless, upcoming Indian AI startups are already facing challenges as VCs are becoming more focused on rapid revenue growth, according to Prayank Swaroop of Accel.
“Even to the pre-seed companies, we say, ‘Hey, you need to show whatever money you have before your next fundraiser. You need to start showing proof that customers are using you.’ Because so many other AI companies exist,” Swaroop explained.
Perhaps, it is time for Indian investors to review their strategy and consider insights drawn from the success stories of OpenAI and Black Myth: Wukong.
