Artificial intelligence (AI) is one of the most disruptive and innovative technologies today, changing the way and direction of development in various industries and fields. As an important investment object in the primary market, AI projects have also attracted extensive attention from investors and entrepreneurs. This article will introduce the current situation of AI project financing in the primary market from the following three aspects, analyze the reasons for the current situation, predict the future financing market, and give some financing suggestions to AI project parties.

1. The financing status of AI projects in the primary market

According to the 2023 AI 50 list released by "Forbes" magazine, the list selects the 50 most promising AI startups in the world. These companies have received a total of 27.2 billion US dollars in financing, of which Microsoft invested 10 billion US dollars in OpenAI . According to the "Top AI Companies 2023" report released by CB Insights, the report shows the most influential AI companies in various subfields, such as Adept, Anthropic, Cohere, etc.

From these data, it can be seen that AI projects exhibit the following characteristics in the primary market:

• Financing is large but unevenly distributed. Some top projects have received huge investment, while most projects are still in the seed stage or angel stage, and it is difficult to obtain more financial support.

• There are various financing subjects, but the concentration is high. Various types of investment institutions are interested in AI projects, including venture capital, private equity, corporate investment, etc., but it is mainly dominated by a few well-known institutions, such as Sequoia and Merritt.

• Financing is broad, but application-focused. AI projects involve various industries and fields, such as medical care, education, finance, entertainment, security, etc., but they focus more on solving practical problems and meeting user needs, rather than purely pursuing technological innovation and breakthroughs.

2. Factors affecting the financing of AI projects in the primary market

The financing status of AI projects in the primary market is affected by many factors, mainly including the following aspects:

• Technical factors. AI technology has made significant progress and development in recent years, such as the emergence of various new algorithms, models, platforms, applications, etc., which have improved the technical level and commercial value of AI projects.

• Market factors. AI technology has a wide range of applications and needs in various industries and fields, such as improving efficiency, reducing costs, and optimizing decision-making, which increases the market potential and competitive advantages of AI projects.

• Policy factors. Governments of various countries have attached great importance to and supported AI technology, such as formulating various strategic plans, policy measures, laws and regulations, etc., providing a favorable environment and conditions for the development of AI projects.

• social factors. AI technology is of great significance to social progress and common prosperity. For example, it can help solve various complex problems, such as climate change, disease prevention and control, poverty relief, etc., and enhance the social responsibility and influence of AI projects.

3. The financing prospect of AI projects in the primary market

The financing of AI projects in the primary market will continue to maintain rapid development and growth in the future, and will also face more challenges and opportunities. Here are some possible financing prospects:

• The scale of financing will be further expanded, but the differentiation will be more obvious. With the continuous innovation and breakthrough of AI technology, as well as the continuous expansion and deepening of the market, some excellent AI projects will receive more financial support, and even achieve listing or mergers and acquisitions, while most ordinary AI projects will face greater funding Pressure and Competitive Risk.

• Financing subjects will be more diversified, but professionalism will be more important. With the continuous popularization and intelligentization of AI technology, as well as the continuous attention and participation of the society, various types of investment institutions and individuals will be interested in AI projects, but they also need to have higher professionalism and rationality in order to better Evaluate and manage AI projects efficiently.

• The financing field will be wider, but the core technology will be more critical. With the continuous application and demand of AI technology in various industries and fields, as well as the continuous innovation and participation of society, various types of AI projects will have broad development space and opportunities, but they also need to focus on innovation and breakthroughs in core technologies. In order to better differentiate and optimize their own products and services.

4. The financing status of AI+Web3 projects in the primary market

According to Zhihu's column "Inventory of the Latest Financing Projects of "AI+Web3" Concept", this column collects the latest financing projects of several AI+Web3 concepts in 2023, including Botto, Mawari, Addressable, Plai Labs, Trusta Labs, Creatora and Sortium et al. From these data, it can be seen that the AI+Web3 project has the following characteristics in the primary market:

• Financing scale is small, but growth rate is fast. Among these projects, the largest financing amount is Plai Labs’ $32 million seed round, the smallest financing amount is Sortium’s $7.75 million seed round, and the average financing amount is around $14 million. Most of these projects were established in 2021 or 2022, are in the early stages, and have not yet formed a large scale and influence.

• There are fewer financing entities, but the quality is high. Among these projects, the largest investment institution is a16z, which participated in the investment of two projects (Plai Labs and Creatora), while other investment institutions only invested in one project. Some of these investment institutions are well-known venture capital institutions, such as a16z, Arca, SevenX Ventures, etc., and some are investment institutions that focus on blockchain or artificial intelligence, such as Blockchange Ventures, Fabric Ventures, Vision Plus, etc.

• The field of financing is relatively wide, but it focuses on games and NFT. More than half of these projects are related to games or NFTs. For example, Botto, Plai Labs, Creatora, etc. are all projects with games or NFTs as their main application scenarios. Other projects involve on-chain data analysis, content delivery, marketing and other fields.

5. Financing suggestions for AI projects in the primary market

According to the financing status, reasons and prospects of AI projects in the primary market, this article gives the following financing suggestions:

• Pay attention to the innovation and breakthrough of core technology, rather than follow the trend to speculate on concepts. AI technology is the most important foundation and core of AI projects. Only by owning its own core technology and constantly innovating and breaking through can it win the trust and support of investors, and at the same time improve its competitiveness and value.

• Focus on the discovery and satisfaction of user needs and values, rather than simply pursuing technical indicators. AI technology exists to solve practical problems and meet user needs. Only by closely combining user needs and continuously discovering and satisfying user values can we win the recognition and love of users, and at the same time improve our market potential and influence .

• Focus on the fulfillment and dissemination of compliance and social responsibility, rather than neglecting ethics and morality. AI technology is a double-edged sword, it can bring benefits as well as harm. Only by complying with relevant laws and regulations, and constantly fulfilling and disseminating our social responsibilities, can we win the respect and support of the society, and at the same time improve our credibility and influence.

• Focus on data security and privacy protection, rather than misuse and leakage of data. Data is an important resource and asset for AI projects, as well as sensitive information and rights of users. Only by legally collecting, storing, using, and sharing data, and effectively preventing and responding to data security and privacy risks, can we win the trust and loyalty of users, and at the same time avoid legal disputes and public opinion crises.

• Focus on algorithmic fairness and transparency, rather than discrimination and misleading users. Algorithms are the core technology and tools of AI projects, as well as the basis and reference for users to make decisions. Only by designing, training, testing and optimizing the algorithm fairly, and explaining and explaining the principles, logic and results of the algorithm to users in a timely manner, can we win the recognition and respect of users, and at the same time improve the quality and effect of the algorithm.

• Focus on social benefits and value, rather than purely pursuing economic benefits. Social benefits and value are the ultimate goal and significance of AI projects, as well as the expectations and needs of society. Only by actively solving problems, creating value, and promoting progress for the society, and taking the initiative to take responsibility, give back to the society, and share results, can we win the praise and support of the society, and at the same time realize our own development and growth.

In short, the current situation and prospect of AI project financing in the primary market shows the great potential and influence of AI technology in various aspects, and also presents the challenges and opportunities of AI projects in various aspects. AI project parties should formulate reasonable financing strategies and goals based on their own characteristics and advantages, as well as market changes and needs, and focus on core technologies, user needs, compliance, social responsibilities, etc., in order to better obtain financial support , market recognition, social influence, and realize its own value.

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