The AI Fund, founded by renowned AI expert Andrew Ng, is aiming to raise over $120 million for its second fund, AI Venture Fund II, which supports small expert teams utilizing AI to address critical issues.
According to a SEC filing, AI Venture Fund II has secured $69.75 million from 13 partners, leaving around $50 million for future investments. Ng, a leading figure in the AI community, has been involved in groundbreaking projects like Google Brain and Coursera before launching AI ventures.
The AI Fund, initiated in 2018 with $175 million, provides funding at the seed and series A stages of startups, facilitating them to operate discreetly until they are fully prepared. Ng’s vast professional network is at their disposal for guidance and support.
Notable backers of the AI Fund include Greylock Partners, New Enterprise Associates, Sequoia Capital, and SoftBank Group. The fund has a portfolio of 38 companies, including notable ones like WhyLabs, Landing AI, and Baseten.
Despite initial reports of aiming to raise $50 million, the targeted amount for AI Venture Fund II now stands at $120 million. This reflects a change in the AI investment landscape, possibly indicating a shift away from generative AI investments.
Recent data from Pitchbook shows a significant decline in generative AI dealmaking, with VC deal value dropping by 76% in Q1 2024 compared to Q3 2023. Enterprise concerns over productivity gains and data security may be contributing to this decline.
Boston Consulting Group surveys suggest that C-suite executives are hesitant about the benefits of generative AI and are cautious due to potential errors and data vulnerabilities. Implementing generative AI at scale is proving more challenging than anticipated, leading to a more careful approach by businesses.
