Beyond the GenAI trend: understanding the challenges of start-ups shaping the future of AI

Understanding the future of Artificial Intelligence (AI) and the challenges around the technology, or rather the many AI techniques, has become a major concern for economic and political leaders. This has been especially true since November 2022 and the "wow" effect created by the launch of ChatGPT by OpenAI, which surprised even the scientific community. 

However, many start-ups existed before ChatGPT and were working on various AI models. They still exist; some have pivoted to adopt the models behind Generative AI (LLMs, transformers, etc.), others are trying to ride this new wave to revitalize their product, and many continue their journey in this rapidly evolving world of AI. So how can an AI start-up differenciate its products among all AI solutions? How to always ensure having cutting-edge technology? Will GenAI tools or new regulations like the EU AI Act disrupt the business models of AI start-ups? Should companies create their own models or simply fine-tune them? What financial and human resources are needed to maintain growth? 

Investors, you will find, for example: 

• Analytical keys to identify the most interesting AI start-ups, considering the importance of AI models and their ability to adapt to technological developments. 
• The impact of GenAI, which primarily affects the productivity of start-ups. 
• An analysis of investment needs.

AI Start-up Leaders, you will find, for example: 

• Trends in the French and European AI start-up market: Tips to prepare for the EU AI Act based on the risk level. 
• Elements to prepare for the EU AI Act based on the risk level. 

As a consulting firm specializing in M&A, particularly in the technology sector and Artificial Intelligence, BearingPoint Capital regularly faces these issues. The resulting report is based on over thirty interviews conducted with AI start-ups and scale-ups in France, as well as the analysis of dozens of European and American AI companies conducted by BearingPoint Capital as part of "Due Diligence." These companies represent several sectors, with a predominance of FinTech, HRTech, HealthTech, and DeepTech. 

“Whether they are ‘‘Core AI makers’’ or ‘‘AI fine-tuners,’’ start-ups must demonstrate rapid and controlled adaptability to prepare for the daily innovations in the AI sector. No one is immune to a breakthrough innovation like ChatGPT, but everyone can adopt good practices to pivot if necessary.”

Victor Creté, Manager at BearingPoint Capital

Author:
- Victor Crété, Manager