The AI Draft: Predicting the Future Value of AI Companies
In the latest episode of the Cerebral Valley podcast, hosts Eric Newcomer, James Wilsterman, and Max Child dive into one of the most eagerly anticipated events in the artificial intelligence sector—the AI draft. This episode features a range of discussions about selecting the companies they believe will yield the highest valuations in the AI landscape over the next few years, specifically by 2028.
The draft is a follow-up to a similar event held the previous year, where participants selected a range of private companies in AI. Newcomer takes a moment to recap the past year, hinting at his strong position from the last draft, bolstered significantly by his initial pick of OpenAI, which came with a hefty $75 billion handicap—though it paid off handsomely.
Explaining the Draft Rules
James lays out the rules governing this competitive selection process, emphasizing its complexity. Here’s how it works: each participant drafts a team of AI companies that, by the end of 2028, will hold the highest aggregate market value, factoring in private market valuations, exits, or initial public offerings (IPOs).
The rules are tight—only companies that have raised over $100 million and are not solely focused on healthcare, defense, or robotics are eligible. This year, participants also have the option to drop underperforming companies and add new ones to their roster, reminiscent of fantasy sports strategy.
Drafting Begins: Initial Picks Made
As the draft kicks off, Eric reaffirms his dominance by securing OpenAI first, while James takes the second pick with Scale AI. Max is quick to point out the intrigue surrounding Scale AI's mix of data labeling services and rapid revenue growth, although it's met with some skepticism regarding its long-term viability.
Eric goes on to select Perplexity and Safe Super Intelligence, both of which promise to make a dent in the competitive search and AI market, respectively. Max opts to solidify his strategy by picking emerging player Sierra, a customer service AI startup founded by the former CEO of Salesforce.
Valuations and Market Trends
As they progress through the draft, participants consider the latest valuations reported for an array of companies. Eric seems to be ahead with a total valuation approaching $100 billion, largely due to the success of OpenAI and key picks like Glean and Mistl.
James has his eyes on Anthropomorphic AI and Hugging Face, companies that he believes will see substantial growth thanks to their innovative approaches to AI. Meanwhile, Max is banking on his picks, including Data Bricks and Cohere, to gain traction and positively surprise in valuations.
The Importance of Strategy in AI Investing
When discussing their strategies, the complexity of AI investments becomes evident. The underlying theme is that not all companies are created equal, and some may even see their business models rendered obsolete by advances in technology. Eric emphasizes the need for foresight, particularly around coding and generative AI, through picks like Codium and Harvey, both focusing on empowering engineers with AI tools.
Max opts for increasingly uncertain bets toward the end of the draft, selecting relative newcomers like Heia and Poolside, as he recognizes the dynamic and rapidly shifting landscape of AI startups.
Final Thoughts and Team Recaps
As the draft culminates, each participant reflects on their choices, weighing the risks and opportunities at hand. The selection process isn't merely about picking popular firms; it’s about understanding market sentiment, emerging trends, and potential game-changer technologies that could redefine the industry.
Eric's team now includes high-profile companies and a mix of emerging leaders, while Max and James also showcase their selections, all with a keen eye on future growth. Despite mixed sentiments, there remains optimism around AI's transformative potential—further emphasized in their ongoing discussions leading up to the forthcoming AI Insider event.
This spirited AI draft serves not just as a game, but as a lens into the intricate world of AI investments—where the stakes are high, and the pressure to predict the next big player is palpable. As these firms evolve, listeners are left to ponder: who will emerge victorious in the race to redefine the AI landscape by 2028? The discussion remains open, and engagement from their audience is welcomed, emphasizing the collaborative nature of understanding progress in this ever-changing field.
More updates and insights are sure to follow as their teams develop across the coming years, making this episode a captivating precursor to an exciting future in AI development.
Part 1/8:
The AI Draft: Predicting the Future Value of AI Companies
In the latest episode of the Cerebral Valley podcast, hosts Eric Newcomer, James Wilsterman, and Max Child dive into one of the most eagerly anticipated events in the artificial intelligence sector—the AI draft. This episode features a range of discussions about selecting the companies they believe will yield the highest valuations in the AI landscape over the next few years, specifically by 2028.
Bouncing Back from Last Year’s Draft
Part 2/8:
The draft is a follow-up to a similar event held the previous year, where participants selected a range of private companies in AI. Newcomer takes a moment to recap the past year, hinting at his strong position from the last draft, bolstered significantly by his initial pick of OpenAI, which came with a hefty $75 billion handicap—though it paid off handsomely.
Explaining the Draft Rules
James lays out the rules governing this competitive selection process, emphasizing its complexity. Here’s how it works: each participant drafts a team of AI companies that, by the end of 2028, will hold the highest aggregate market value, factoring in private market valuations, exits, or initial public offerings (IPOs).
Part 3/8:
The rules are tight—only companies that have raised over $100 million and are not solely focused on healthcare, defense, or robotics are eligible. This year, participants also have the option to drop underperforming companies and add new ones to their roster, reminiscent of fantasy sports strategy.
Drafting Begins: Initial Picks Made
As the draft kicks off, Eric reaffirms his dominance by securing OpenAI first, while James takes the second pick with Scale AI. Max is quick to point out the intrigue surrounding Scale AI's mix of data labeling services and rapid revenue growth, although it's met with some skepticism regarding its long-term viability.
Part 4/8:
Eric goes on to select Perplexity and Safe Super Intelligence, both of which promise to make a dent in the competitive search and AI market, respectively. Max opts to solidify his strategy by picking emerging player Sierra, a customer service AI startup founded by the former CEO of Salesforce.
Valuations and Market Trends
As they progress through the draft, participants consider the latest valuations reported for an array of companies. Eric seems to be ahead with a total valuation approaching $100 billion, largely due to the success of OpenAI and key picks like Glean and Mistl.
Part 5/8:
James has his eyes on Anthropomorphic AI and Hugging Face, companies that he believes will see substantial growth thanks to their innovative approaches to AI. Meanwhile, Max is banking on his picks, including Data Bricks and Cohere, to gain traction and positively surprise in valuations.
The Importance of Strategy in AI Investing
When discussing their strategies, the complexity of AI investments becomes evident. The underlying theme is that not all companies are created equal, and some may even see their business models rendered obsolete by advances in technology. Eric emphasizes the need for foresight, particularly around coding and generative AI, through picks like Codium and Harvey, both focusing on empowering engineers with AI tools.
Part 6/8:
Max opts for increasingly uncertain bets toward the end of the draft, selecting relative newcomers like Heia and Poolside, as he recognizes the dynamic and rapidly shifting landscape of AI startups.
Final Thoughts and Team Recaps
As the draft culminates, each participant reflects on their choices, weighing the risks and opportunities at hand. The selection process isn't merely about picking popular firms; it’s about understanding market sentiment, emerging trends, and potential game-changer technologies that could redefine the industry.
Part 7/8:
Eric's team now includes high-profile companies and a mix of emerging leaders, while Max and James also showcase their selections, all with a keen eye on future growth. Despite mixed sentiments, there remains optimism around AI's transformative potential—further emphasized in their ongoing discussions leading up to the forthcoming AI Insider event.
Conclusion
Part 8/8:
This spirited AI draft serves not just as a game, but as a lens into the intricate world of AI investments—where the stakes are high, and the pressure to predict the next big player is palpable. As these firms evolve, listeners are left to ponder: who will emerge victorious in the race to redefine the AI landscape by 2028? The discussion remains open, and engagement from their audience is welcomed, emphasizing the collaborative nature of understanding progress in this ever-changing field.
More updates and insights are sure to follow as their teams develop across the coming years, making this episode a captivating precursor to an exciting future in AI development.