Menlo Park-based firm Sapphire Ventures broke the news Tuesday that the firm plans to invest over $1 billion in AI enterprise startups.
Jai Das, the firms president and co-founder, made the announcement at the Reuters Momentum conference in Austin, Texas. While it's a big commitment, Sapphire has been hungry for AI for years. It says it has already deployed $2.4 billion across 60 AI-focused companies to date. The next billion will be focused on what it calls "the next generation of B2B companies making AI easily accessible by leveraging data to better predict outcomes." Specifically, it called out martech, fintech, healthtech and workplace productivity.
Das told the Austin Business Journal via email that the core of AI is data and analytics, something the firm has had a special interest in since its founding.
"With our new $1B+ commitment we intend to focus on all areas of the emerging AI tech stack including foundation models, enablers and middleware, and next-gen AI applications," he wrote. "This next AI wave will replace task-specific models that have dominated the AI landscape to-date. We look forward to partnering with companies that are not only improving existing workflows and software, but are building AI-native solutions that reinvent applications and user experiences."
Funding for the initiative will come from the firms $10 billion assets under management and $3 billion in dry powder, according to Reuters.
While Sapphire is excited about generative AI, its investing thesis remains focused on finding passionate and hard-working founders, he wrote.
"We’re excited to be part of the conversation as generative AI progresses and look beyond the hype to find ways that this technology can help us work and live better," he wrote.
The firm also said it is building an AI Community as part its Sapphire Communities project for company CEOs and executives in its portfolio to learn new strategies and accelerate growth.
While many of the most well-known AI companies are based in the Bay Area, Das said that Toronto is also a hot spot for AI infrastructure companies. But AI startups are flourishing almost everywhere.
"AI powered applications are flourishing in the software hubs like Seattle, Boston, Austin and NYC," he wrote.
The Bay Area has seen AI companies capture venture investments that some would consider outsized. Inflection AI announced earlier this month a $1.3 billion funding round, and Celestial AI and Typeface AI each announced $100 million rounds respectively.
A handful of other rounds have occurred in the Bay Area, the most recent with Pano AI announcing a $17 million extension round.
