This article by Berber J. is full of red flags. It starts with the quote below, which is a classic pump strategy where 'someone' leaks to the press that an AI venture is in talks to raise billions of dollars (a secret - an exclusive...), and the early stage VCs (who often have very large funds and/or include billionaires) "are in talks" to lead the round or participate.
Everyone is in talks -- it's not news, but in some cases it's leaked to leverage fund raising and exploit FOMO in other investors. None of this has actually occurred (investments closed)-- it's just leaked that talks are taking place, gets reported in one publication and then often repeated dozens of times. If they do occur (investments at that valuation), the early stage VC firm might lead or participate, but the percentage of ownership in the earlier round is what typically generates all the profit (at much lower valuations).
The later stage investment (a few months at 6x valuation in this case) has generated no ROI in many recent cases. It's possible today (reported to have occurred with Open AI) to sell early shares in the late stage of the pump up (aka 'dump', when it occurs in pump and dump schemes). This type of strategy is obviously intended to exploit big dumb investors caught up in the hysteria.
Note that in this case the venture in question started working on their product a year ago. Contrast that with KYield, which has 27 years of R&D in two generations with two distinct, end-to-end native AI systems developed from the theorem stage, the first of which is the KOS -- a highly refined, well-prepped product and system. The KOS has a massive customer pipeline and a very clear TAM in the tens of billions USD. Moreover, we are the inventors and pioneers of a large and entirely new category (EAI OS).
Among other things, this speaks to the extremely different criteria SV VC firms have for out of state ventures (NYC, Boston, and Seattle as well, though not as extreme). Cognition labs is located in San Francisco (where else?).
This is what's wrong with VC, not limited to Founders Fund, but rather has become the game played by a few dozen VC firms. This type of behavior is damaging not just to VC and AI, but the entire economy.
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Cognition Labs, a startup developing an artificial-intelligence tool for writing code, is in talks with investors to raise funding at a valuation of up to $2 billion, in a test of the investor frenzy around new AI technology.
If completed at that valuation, the funding would increase the startup’s valuation to nearly six times what it was weeks ago. Silicon Valley venture firms including Founders Fund, already a shareholder in Cognition, are in talks to invest in the current round, people familiar with the matter said.
Cognition only began working on its product last year and doesn’t generate any meaningful revenue.
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2wJukka Alanen Spot on! Agentic AI is undoubtedly the future. Raghu Bala and his team at Synegetics.ai have achieved something really pioneering work in the Agentic AI workflow process space