Menu

A new era of AI

Post on 27 October 2023 by Christian Teichmann & Laura Keilhofer

A new era of artificial intelligence

Is AI a feature or a standalone business? Takeaways of a full day of AI discussions.

Artificial Intelligence is talked about everywhere right now: investment decisions, leadership discussions, the press, social media and sometimes even at the dinner table. We, at Burda Principal Investments, have also shared our perception of (Generative) AI in our series on the topic on our “Perspectives” blog (read the latest piece here). We have been carefully monitoring the undeniable hype in the investment scene that is currently surrounding artificial intelligence, following the launch of LLM-based applications such as Chat GPT earlier this year. However, we also believe that Generative AI will be more than “just the next hype” given the immense significance of the technology.

That is because Generative AI is not only a buzz topic but creates real opportunities for all kinds of businesses and therefore us as venture capitalists as well. During the panel discussion at DLD AI Summit alongside Alexander Kudlich, partner at 468 capital, Jonas Andrulis, founder of Aleph Alphas, and Adam Bittlingmayer, founder of Modelfront, our CEO Christian Teichmann describes the opportunity as “absolutely massive” stating that “every company needs an AI strategy right now”.

The abundance of opportunities that this technology creates is also why the DLD team surrounding Steffi Czerny, in partnership with venture capital funds Burda Principal Investments and 468 Capital, have decided to bring together industry experts, entrepreneurs, investors, and opinion makers for a full day of discussions at the DLD AI Summit in Munich during the first week of September.

Here are five key takeaways from the conference:

1. Having an AI strategy is indispensable for every business:
Every company, start-up, and enterprise, needs to think about artificial intelligence and how it is best put to use in their respective business models – just like the internet once became relevant for each and every single one of us and is now engrained in our society, so will artificial intelligence sooner rather than later. The technology has the potential to reduce costs, increase productivity, and open up completely new fields of business that we haven’t even thought about before.

2. AI systems today are based on pattern recognition and memorization:
For now, AI has no underlying understanding of what’s going on, it is merely memorizing patterns. While this makes it potentially good at tests, much more improvement is needed to get it to a point where it can be a fully trustworthy resource. In turn, AI (currently) still needs human checks and balances and cannot work on its own, says Jonas Andrulis, the founder of Aleph Alpha – the European answer to Open AI.

3. Foundation models are the most defendable business models in the (current) AI market:
While the internet has made businesses in the application layer the clear winners, it is yet to be established whether AI applications will be able to establish a clear MOAT. For now, it looks like foundation layer businesses, such as Open AI, may become the big “winners” of this revolution as Ludwig Ensthaler put it in his panel on the history and future of GenAI. These businesses also need strategic partnerships early on to be able to improve and scale their product offering. While this is something that is not typically seen as a positive in the venture capital world, AI yet again bends the boundaries of the “usual”. Christian Teichmann, Alexander Kudlich, Jonas Andrulis also second this in their panel talk, naming also the example of Aleph Alpha, which is taking on strategic investors in the upcoming financing round.

4. Content production can happen at zero cost with AI:
In the corporate world, and especially in media, we will be seeing another transformation as GenAI disrupts how we produce content. Martin Weiss, CEO of Hubert Burda Media, described how LLMs enable us to produce content at basically zero marginal cost – however, this will further push the importance of brands to ensure consumers can trust the quality of the content. This is likely to give incumbents an edge over newcomers in the industry.

5. AI is a global technology – and its implications stretch far beyond European borders:
As governments worldwide are putting AI regulations into place, European governments must think globally in their regulation making (and so should the other continents). While regulation is certainly necessary, we can’t have local solutions to a global topic – or Europe may well risk to stay behind the U.S. and Asia on the curve. Multiple speakers throughout the day pointed out the significance of European technology in the GenAI space, while also hinting at the importance of setting global standards to ensure long-term competitiveness of European businesses.

Listen to Christian Teichmann, Jonas Andrulis, Adam Bittlingmayer and Alexander Kudlich discussing “Generative AI: Business or Feature?” here:

You are currently viewing a placeholder content from Default. To access the actual content, click the button below. Please note that doing so will share data with third-party providers.

More Information

DLD AI Summit 2023 | Christian Teichmann (CEO Burda Principal Investments) and Jonas Andrulis (CEO Aleph Alpha)
© Picture Alliance for DLD / Hubert Burda Media

If you weren’t able to join the DLD AI Summit you can listen to all panel discussion on YouTube.