The Beverly Hills, California-based venture capital firm Sound Ventures, led by general partners Ashton Kutcher, Guy Osiri, and Effie Epstein, announced the creation of a new $240 million artificial intelligence fund last week, already half of this money has been invested in three companies: OpenAI, Anthropic, and Stability.AI.
Epstein said that in total, the firm intends to direct investment funds to the development of six companies, and there are no plans to save money for subsequent rounds. She also noted that the support of competing players in the AI market is not a barrier to financing. The Company does not disclose information about the amount of investments due to each firm from its investment portfolio.
The strategy of Sound Ventures does not correspond to the standard practice of venture investment. The highly concentrated nature of the artificial intelligence fund confirms that shortly, according to the company’s forecasts, there are very few influential organizations due to the need for capital to cover computing costs and technical talents. The technological, economic, and social dimensions of external space have transformed as a result of the active use of AI.
According to Epstein, the timing of the formation of the fund was short due to the work that the firm has done over the past 15 years in the field of investment. She also noted that in the artificial intelligence ecosystem, all companies recognize that they follow a similar mission. Epstein stressed that firms are competing for talent, and the task of Sound Ventures is to support players from the perspective of storytelling, branding, and marketing. In her opinion, these efforts will benefit the entire ecosystem.
Sound Ventures provides funds to firms that are in a competitive state concerning each other, but this happens transparently. Companies know that their competitors receive investments from the same source, understanding the strategy of Kutcher, Osiri, and Epstein, and trusting them.
The relationships of the firms included in the Sound Ventures investment portfolio develop in different ways and this is not always the story of a successful partnership. For example, last week there was a sharp collapse in the value of Chegg shares. The price drop was the result of the company’s public statement that the OpenAI chatbot, ChatGPT, is destroying its business to a certain extent. Both of these firms are part of the same investment portfolio.
Sound Ventures, according to Epstein, uses artificial intelligence to find suppliers to understand where talent is going. The company has two business strategies. One of the concepts is aimed at achieving growth and development. This activity scenario is fundamental.
The second strategy involves investing in an early-stage fund. This money is provided, as a rule, to software development companies as part of Series A and B funding rounds. In the field of artificial intelligence, such an investment approach means providing application-level tools that are on top of models. This is an area that has been deeply studied by Sound Ventures and in which the firm has shown high activity.
As we have reported earlier, AI Startup Pinecone Raises $100 Million.