As U.S. majors pledge billions of investment in British AI, in Sweden investors are focusing on where it can make most difference.
On the first full day of President Trump’s State Visit to Britain, Nvidia, Microsoft, OpenAI and Google pledged to invest billions of pounds in investment in U.K. AI.
It comes after weeks of nervousness about the wider sector, and slumps in share prices for many AI-oriented tech companies. When OpenAI CEO Sam Altman admits the industry is over-hyped and Alibaba co-founder Joe Tsai sees the ‘beginning to see some kind of bubble,’ then it’s probably justified.
In the Swedish capital, however, investors are taking a rather typically lagom approach (neither too little nor too much). After Silicon Valley, Stockholm generates more startups than any other city – think Klarna. Here, AI-tech startups have been springing up faster than mushrooms in the forest.
Yet shades of similarity remain with the dot.com bubble. Are we here again?
“It could be a bubble,” admits Tove Larsson, General Partner at Norrsken VC, the leading Swedish impact investor. “This is one of the most intense capital flows we have seen. There’s a clear risk that 80% of these companies will be out of business eventually.”
“Most of the companies we’ve seen in the AI space focus on productivity gains, and the rest on robots. The real wins will come from focusing on the problems that really matter and building AI solutions to them.“
Tools such as Chat GBT may have been widely embraced, but they primarily enhance individual productivity, rather than profit.
A recent study by MIT showed that despite $30-40bn of enterprise investment in Generative AI, 95% of organisations have zero return. It too concludes that tools such as Chat GBT may be popular but they primarily enhance individual productivity, rather than profit.
“A shake-out in AI feels inevitable – the question isn’t if, but when,” agrees Ali Sarrafi, a former Spotify exec and co-founder of the data science and analytics company Combient Mix, bought by Silo AI and later AMD. His latest AI-related venture, Kovant, is still in stealth mode.
