Generative AI funding race heats up

Welcome back. It's another day. So another AI startup is landing a fresh round of funding, this time at SoftBank, the Japanese tech investor backing the search startup perplexity tie at a $3 billion valuation. We both experimented with it. Dear Tribosa is here to break down the details for today's tech check, Deirdre. Hey, Kelly. So Bloomberg first reported the details, but a source familiar confirms that SoftBank is indeed planning to to participate in this round. It shouldn't come as a surprise. Masayoshi Son, we've talked about this and his team has been saying for months now that they are going on the AI offensive. And perplexity is really a darling in the space with the term sheet that already includes Jeff Bezos and NVIDIA. Now Softbank's participation though it does raise questions about the frothiness of Gen. AI startups and the ecosystem. Last time SoftBank went on the offense and deployed 10s of billions of dollars through the Vision funds one and two, it did so largely in late stage rounds, inflating valuations, many of which were ultimately unsustainable. Earlier this week, another buzzy Jenna and I start up stability dot AI. It has struggled with executive turnover and mounting costs. It was able to find a lifeline from a group of investors including ex Facebook executive Sean Parker and CO2 management. A crossover fund that likes up make many traditional VC investors consider to be Silicon Valley outsiders that is coming in at later stages to inflate those valuations. So this space is as hot as ever Kelly and Tyler and you know the real North star is open AI, which has you know overcome many, many controversies, many leadership challenges to sign deals with the major tech companies and is even proving to provide them with some competition the likes of Microsoft even. I mean, at least here, Deirdre is an example of not just the incumbents winning exactly. And I think that's what's so exciting, why so much money is being poured into startups, some of them with little to show for a little path to profitability or even business models. It's this idea, and I'll use Perplexity as an example, does have a business model, It charges a subscription fee for a more advanced version of it. The idea that it can compete with an incumbent like Google, that it's native generative AI and creates a better user interface than maybe Google is able to. And that's the promise of this company, for example. All right, Deirdre. Thank you very much, Deirdre Bosa.