Generative AI is the buzziest new technology in Silicon Valley. Meet the investors backing it.

Welcome to LinkedIn News Tech Stack, which brings you news and insights about the founders, investors, companies and trends on the cutting edge of emerging technology, with a focus on AI and machine learning; cybersecurity and privacy; and B2B SaaS. 

Click subscribe to be notified of future editions and follow me on LinkedIn for other tech updates.

As always, let me know if you have ideas or feedback on something that could be a fit by sending me an InMail. And if you see a story that interests you, be sure to join the conversation. 

Zooming In

A deep-dive into one big theme or news story every week.

Generative AI is suddenly everywhere. 

The buzzy subset of artificial intelligence – which refers to AI that can create anything from text, images and videos to even code – has recently exploded in popularity.

Much of it is because of startups like Cresta, Adept AI Labs, Stability AI and Jasper, who have emerged at the forefront of building applications tailored to this new class of language model, and have notched eye-popping valuations during an otherwise lackluster funding environment.

But also backing them are investors from a number of venture capital firms. While investment in artificial intelligence has slowed in 2022 versus last year, firms including Insight Partners, Madrona Venture Group and Sequoia Capital said that they continue to prioritize generative AI.

Here are five venture capitalists to know who are spearheading investments in generative AI. Note that this list, by no means, is exhaustive. 

Gaurav Gupta, Lightspeed Venture Partners

Key investments: Stability AI, Circle Labs

Why he’s bullish on generative AI: Lightspeed Venture Partners was part of the recent $101 million financing round of Stability AI, the open-source generative AI company that took the world by storm with the release of Stable Diffusion, its text-to-image model similar to OpenAI’s DALL-E.

Gupta said investing in the company was a no-brainer given how accessible it makes generative AI for everyone due to its open-sourced nature – something that’s important because of Lightspeed’s fundamental belief that generative AI can one day change a broad spectrum of industries.

“We’re just on the cusp of what’s possible,” he told LinkedIn News. “This technology can one day be used by everybody, and even be a part of enterprise SaaS softwares.”

Sonya Huang, Sequoia Capital

Key investments: Glean, Hugging Face, Streamlit

Why she’s bullish on generative AI: Huang is a bit of a mini-celebrity in the generative AI world. She organized the burgeoning space in a market map that groups together companies tackling similar aspects to make sense of the landscape, which went viral.

She’s unabashedly bullish on the promise of generative AI because she believes that not only has the technology reached maturity, but it’s also starting to deliver results.

“Machines used to be good at rote labor – picking and packing and predicting spam – but they couldn’t do what we as humans are good at, like writing, talking, communicating and visuals,” she said. “What’s different about the current iteration of large language models is they’re good enough to replace or augment knowledge work and creative work. Machines are just starting to get good at thinking, understanding, and creating sensical and beautiful things.”

George Mathew, Insight Partners

Key investments: Jasper, Deepdub.ai, Weights & Biases, Tonic.ai, Fiddler AI

Why he’s bullish on generative AI: With his background as an operator (he took the data science company Alteryx public), Mathew knows a thing or two about scaling. And that’s what makes generative AI hot for him.

Generative AI is scaling fast because of huge progress in transformer models – which are AI models that can infer context and thus meaning by tracking relationships in sequential data. That means what was not possible until recently is suddenly possible now, he said.

“What you're seeing with transformer-based models now is that as you keep applying more data, the model continues to profoundly get better,” he said. 

Matt McIlwain, Madrona Venture Group

Key investments: OthersideAI, RelationalAI

Why he’s bullish on generative AI: Madrona has been investing in what McIlwain dubbed as the broader category of “intelligent applications” for a while now. And he doesn’t anticipate slowing down any time soon. In fact, he anticipates 50% of its investments next year to be in the intelligent applications and generative AI space.

That’s because advances in natural language processing have given rise to transformer-based foundation models like OpenAI’s GPT-3 and Stable Diffusion – on top of which a slew of new companies and applications can be built, he said.

“These applications are reducing the friction to leverage the underlying models and produce something entirely new, versus just getting a recommendation,” he said. “It’s like Netflix creating a whole new film based on your preferences, versus just surfacing recommendations based on your preferences.”

Allie K. Miller, independent investor

Key investments: Hebbia AI, OthersideAI, Sanasai

Why she’s bullish on generative AI: As the former global head of machine learning for startups and venture capital at Amazon (AWS), it was Miller’s job to be able to predict the top trends in AI. And spoiler alert: Generative AI is one of the biggest, she says.

While the last decade of AI has focused on producing use cases that are personalized and predictive, the next five years will expand to be proactive as well – and generative AI and large language models sit at the foundation of this progress, Miller said.

“Everything will be personalized to us (from video content to driving routes), we will glean better insights out of hidden data (from nutrition decisions to climate change forecasting), and we will take action before the decision point (from pre-shipping items we need to pre-solving manufacturing defects),” she said.

TechTok

Catch up on the tech headlines you may have missed this week and what people are saying about them, and join valuable member conversations on LinkedIn.

• In more bad news for tech, Meta CEO Mark Zuckerberg announced massive layoffs at the company — affecting more than 11,000 workers, or 13% of its workforce. Some of the staffers affected are sharing their experiences and reaching out to their networks on LinkedIn. Read the posts here.
• Other tech companies are continuing to slide too. After recently losing its membership in the exclusive club of companies with a market cap of $1 trillion or more, Amazon has become the world's first publicly traded company to shed $1 trillion in market value, Bloomberg reports. 
• In the world of fintech, Bitcoin and other cryptocurrencies plummeted Wednesday as investors digested the stunning collapse of FTX, one of the sector's biggest players. Bitcoin fell more than 14%, trading below $16,000, its lowest level in years; Ethereum, the second biggest digital coin, dropped more than 16%.
• Elon Musk has long mused about remaking Twitter into an all-purpose “everything” app modeled on China's WeChat – something he seems to have taken the first step toward realizing this week. The social media firm has filed paperwork with the Treasury Department that would allow it to process payments, The New York Times reported Wednesday. 
• Electric truck and SUV startup Rivian reported $1.7 billion in losses in the third quarter. But there is a silver lining: Rivian says it has ramped up production and still intends to meet its 25,000-vehicle target by the end of the year despite persistent supply chain snags.

Movers & Shakers

Here’s keeping tabs on key executives on the move and other big pivots in the tech industry. Please send me personnel moves within emerging tech.

• Cloudflare has hired former Twilio revenue chief Marc Boroditsky as its new president of revenue.American Express has hired former Groupon CTO Sachin Devand as its new EVP and Unit Chief Information Officer for digital, data, AI & ML.Boston-based venture capital firm Clean Energy Ventures has hired Future Energy Ventures’ Yi Jean Chow as investment principal and Project Bread’s Victoria Martins as community manager.
• Glasswing Ventures, another Boston-based venture capital firm, has hired Hunter Hartwell as partner, Jessica Mullins Camburn, CPA, MBA as CFO, and Ted Julian as venture partner.BSA | The Software Alliance has hired Michael O'Brien to be VP of global public affairs.

This Week in Tech

A weekly advent calendar of tech history from the archives.

On November 10, 1983, LinkedIn parent company Microsoft formally announced Windows, the graphical user interface for Microsoft DOS-based systems.

ICYMI

Here are other top stories of the week from beyond LinkedIn in the broader world of tech.

• Behind FTX's fall, battling billionaires and a failed bid to save crypto.
• Meet the little-known Twitter exec has the toughest job in advertising right now.
• Speaking of Twitter, its next CEO could be this 6-foot-6 VC who loves pro wrestling, is represented by a Hollywood agency, and is in Elon Musk’s inner circle, according to Fortune.
• TikTok is cutting its 2022 ad-revenue target by at least $2 billion, becoming the latest example of a social media giant affected by a deteriorating ad market.

Thanks for reading. Please share Tech Stack if you like it! And if you have any news tips, find me on InMail or Signal on 646-702-2530.