In the age of AI, tech's little guys need big friends
tech industry loves its garage startup stories. From Hewlett-Packard to Google, the tales of bootstrapped companies that have turned into giants have inspired generations of entrepreneurs. But the huge amounts of money and computing power needed for startups trying to make a go of it with today's hottest technology, the artificial intelligence used in chatbots like ChatGPT and Google Bard, may be making those inspirational tales a thing of the past.
In 2019, Aidan Gomez and Nick Frosst left Google to create an AI startup in Toronto called Cohere that could compete with their former employer. Several months later, they went back to Google and asked if it would sell them the enormous computing power they would need to build their own AI technology. After Google's chief executive, Sundar Pichai, personally approved the arrangement, the tech giant gave them what they wanted.
«It's 'Game of Thrones.' That's what it is,» said David Katz, a partner with Radical Ventures, Cohere's first investor. The big companies like Google, Microsoft and Amazon, he added, are controlling the chips. «They're controlling the computing power,» he said.
«They are selecting who gets it.» Building a groundbreaking AI startup is difficult without getting the support of «the hyperscalers,» which control the vast data centers capable of running AI systems. And that has put the industry's giants in the driver's seat — again — for what many expect to be the most important shift for the tech industry in decades. OpenAI, the startup behind ChatGPT, recently raised $10 billion from Microsoft.
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