PitchBook News - The coming AI shakeout

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The Weekend Pitch

March 24, 2024

Presented by Deloitte

(Megan Woodard/PitchBook News)

Last week, for the first time since I moved to New York City, I saw someone reading a paper copy of The Wall Street Journal on the subway.

The top headlines mentioned Microsoft's curious deal with Inflection AI and Nvidia's new next-generation Blackwell chips. Overshadowed by the dramatics of CEOs Satya Nadella and Jensen Huang, one of the most promising stories for AI startups had slipped off the front page.

That third story, Astera Labs' IPO, was a welcome win for AI investors. But the big swings by Microsoft and Nvidia suggest a shakeout is coming.

This is The Weekend Pitch, and I'm Rosie Bradbury. You can reach me at rosie.bradbury@pitchbook.com or @_RosieBradbury on X.

Trivia

(Richard A. Brooks/Getty Images)

According to PitchBook's debut 2024 Southeast Asia Private Capital Breakdown, there are considerable opportunities for investors across the region. Consumer-focused startups, the report finds, grabbed the largest share of VC deal value in 2023, replacing software as the most funded sector in the region. How much deal value did Southeast Asian B2C startups generate in 2023?

A) $3.7 billion
B) $4.9 billion
C) $1.8 billion
D) $4.2 billion

Find your answer at the bottom of The Weekend Pitch!

Rethinking the rules for ESG

(Qi Yang/Getty Images)

Asset managers are reconsidering their allocations to ESG funds. Various investors have backed away, while others have leaned in. In the impact investment arena, LPs are considering different approaches with commitments dedicated to individualized missions.

Our latest analyst note, The State of Private Market ESG and Impact Investing in 2024, outlines the risks and opportunities still present in investments that fall under the ESG umbrella.

The new frontier in private credit

(John Lund/Getty Images)

Private credit managers are exploring opportunities beyond traditional direct lending and distressed investing strategies. They are eyeing asset-backed finance, which secures loans with collateral tied to real assets and financial assets, such as receivables.

Private credit funds are gaining ground in this new battlefield, taking market share from banks, according to our 2023 Annual Global Private Debt Report, sponsored by the American Investment Council.

AI and SaaS on turbodrive

(Imaginima/Getty Images)

SaaS has been a cornerstone of VC investing for more than a decade, while AI and machine learning emerged recently as a disruptive force of innovation. In 2023 alone, AI and machine learning's share of total VC investment surged by approximately 13 percentage points.

Our Q1 2024 Quantitative Perspectives report explores the dynamic of SaaS, AI and machine learning in the face of an ever-changing venture market, and looks at what investors could expect next in 2024.

Quote/Unquote

Photo courtesy Nasdaq

"AI companies can raise plentiful capital in private markets currently and do not all want to go public while private valuation multiples remain higher than public markets."

—PitchBook senior emerging tech analyst Brendan Burke describing the not-so-rosy AI IPO outlook after Astera Labs' blockbuster debut on the Nasdaq.

Stay tuned

Keep an eye out for these insights and research reports coming out this week:

Emerging Tech Analyst Note: Electric Boats
Q4 2023 France Snapshot
Q4 2023 Digital Health Report
Q4 2023 Healthcare IT Report
Emerging Space Brief: Thermal Batteries

Trivia

Answer: D)

$4.2 billion was invested into Southeast Asian B2C startups in 2023. You can read more about how B2C eclipsed other verticals in the region here.

This edition of The Weekend Pitch was written by Rosie Bradbury, Jessica Hamlin, Madeline Shi and Jacob Robbins. It was edited by James Thorne and Ron Prichard.

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PitchBook News - The coming AI shakeout

Trivia

Rethinking the rules for ESG

The new frontier in private credit

AI and SaaS on turbodrive

Quote/Unquote

Stay tuned

Trivia

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