Why trust Greenbot
Generative artificial intelligence (AI) has become the hottest ticket for investors, with startup funding surpassing $3.9 billion in the third quarter of 2024. The surge in investment comes despite growing concerns about this rapidly evolving technology’s environmental and ethical implications.
Venture capital firms poured money into 206 deals globally in Q3 alone, according to PitchBook. In the United States, $2.9 billion was raised across 127 deals, with the rest coming from major markets like China and Japan. Key players like Microsoft, NVIDIA, and Thrive Capital led the charge, while startups such as Glean and Hebbia secured significant funding of $260 million and $130 million, respectively.
OpenAI is in a league of its own with a staggering $6.6 billion funding round. This elevates its evaluation to $157 billion—indicating confidence in its future dominance. Outside the U.S., Moonshot AI and Sakana AI also made waves, raising $300 million and $214 million, respectively, for focusing on natural language generation and scientific discovery.
Addressing growing concerns
The excitement around generative AI comes with its share of challenges. The demand for computational power has become unprecedented. Gigawatt-scale data centers are predicted to emerge, consuming 5 to 20 times more energy than traditional ones. Companies deploying AI at scale will require infrastructure that’s 20 times as demanding as current setups, warns a report from Bain & Company.
To tackle this, major tech companies are turning to alternative energy sources. Microsoft, for example, announced plans to source energy from nuclear facilities like the infamous Three Mile Island to offset the environmental costs of AI’s growth. However, critics point out that these solutions may take years to install, while the immediate impact of AI-driven power demands continues to strain resources.
A look into 2025
Despite these challenges, the future of generative AI remains bright. Experts like Brendan Burke, Senior Analyst at PitchBook, highlight the growing use of these tools across industries, from business analytics to creative services. “Large customers are rolling out production systems that take advantage of startup tooling and open-source models,” Burke told TechCrunch, emphasizing the potential for profitability.
The next year holds the potential for the industry to shift its focus to growth. Molly Alter of Northzone predicts that 2025 will be “the year of profitability for AI.”
“Last year it was more focusing on revenue growth,” Alter said. “This year, it’s going to be, instead of all about grow, grow, grow, it’s going to be, ‘wow, if I use AI, my margins are going up.'”
Generative AI is reshaping how industries think about efficiency and innovation. However, as investment continues to flow, balancing rapid advancement with sustainable practices will be key to ensuring a future that benefits both businesses and the environment.
