AI Companies and Applications Have a Lot to Prove in 2024

For many companies, 2023 was a year of discovery for generative AI - after the breakout success of ChatGPT and GPT-4, the power of the technology was suddenly apparent to a much larger audience. However, 2024 may be an even more pivotal year, as it will demonstrate the value of many real-world AI applications. Generative AI will lead to huge productivity gains, enable employees to do more creative and engaging work, and have a catalytic effect on many areas - from content creation to customer service to business processes.

Although AI will continue to be the largest sector of VC investment in the United States in 2024, it will also go through a hype cycle that could take two years or more. This period will be crucial for determining which companies are capable of integrating AI profitably and which applications add the most value. As SaaS vendors aggressively integrate generative AI into their product portfolios, a core priority will be adapting or eliminating legacy systems to efficiently handle this shift. The startups capable of innovating on existing business models or offering unique datasets have the potential to become generational companies.