Annual list of promising BI startups highlights one key trend: AI

In today’s big post, we take a look at our annual list of the most promising startups.

But first, this one has some promise.

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The big story

The newcomers

Harlem Capital; Boldstart Ventures; Kimberly White/Getty Images for TechCrunch; Chelsea Jia Feng/BI

Remember these names.

Business Insider spoke to dozens of venture capitalists to compile its annual list of the most promising startups.

We identified 85 young, fast-growing companies based on recommendations from 50 leading venture capitalists. Investors highlighted their portfolio companies and startups with which they had no financial ties.

Surprise! AI-focused startups make up the majority of the list. Leena Rao, who oversaw the list and leads BI’s venture capital and startup team, estimates that about 80% of the startups included are AI-focused.

But there are some nuances to this AI frenzy. Instead of complex language models or general-purpose AI tools, these startups are focusing on specific industries. From coworking spaces to weather forecasting to military defense, they want to leverage AI in a niche.

Outside of AI, some familiar faces remain. Healthcare and fintech continue to draw crowds, even as AI has taken over the startup community.

iStock; BI

As differentiated as AI startups try to be, the market has undeniably become oversaturated.

It’s the norm in the startup world. When investors are willing to invest huge sums of money in an idea, people try to replicate it.

The hype builds until there are too many startups and not enough market share. Then comes consolidation. A new trend emerges. Repeat.

But unlike previous trends (social media apps in the late 2000s or personal financial management tools in the 2010s), AI comes at a huge cost. It’s not cheap to run AI models. Nor is it immediately clear how they can generate revenue.

Historically, the tech industry has been quick to spend money in the name of growth and innovation, but times are different.

We are no longer in the zero interest rate phenomenonand the world’s largest companies are struggling to convince investors that their investments in AI are worth it.

Today, cracks are beginning to appear in the AI ecosystem, even though the revolution began less than two years ago.

This is not to say that artificial intelligence is an overhyped technology. It will have a huge impact on the world. But the industry will have to navigate some troubled waters in the meantime.

It’s hard to say who will make it out alive, but these startups have a better chance than most.

3 things about the markets

Getty Images; Chelsea Jia Feng/BI

Woah, we’re halfway there! Unwinding of the very popular carry trade based on the Japanese yen it will still take some timeaccording to JPMorgan. Arindam Sandilya, co-head of the bank’s global foreign exchange strategy, said speculative investors who unwound the trade were only “50 to 60 percent” in.
The AI hype bubble may be about to burst. The panic that has hit stocks could mark the The Beginning of the End of the AI Craze Investors are on the right track, market strategist Paul Dietrick said, noting the similarities between the recent stock market crash and the dot-com crash.
Some Wall Street strategists smell blood in the water. While some investors are panicking, strategists at firms like UBS and Oppenheimer we see a lot of upside potential for US stocks“Such massive selloffs may provide an opportunity to ‘pick up the babies thrown out with the bathwater,'” writes John Stoltzfus, chief investment strategist at Oppenheimer.

3 things in technology

Getty Images; Jenny Chang-Rodriguez/BI

Prosecutors used an artificial intelligence tool to send a man to prison for life. The person who created the software is now under investigation. Adam Mosher claimed his Cybercheck artificial intelligence tool has helped police and prosecutors in thousands of cases. Serious questions have been raised about the program and its reliabilityand Mosher is now under investigation for perjury.
YouTube’s biggest star is embroiled in some monstrous scandals. Jimmy Donaldson, the creator known as MrBeast, is at the center of Some major workplace controversiesContestants on his reality TV show are complaining about poor filming conditions, and his former employee is accused of sending inappropriate messages to a minor.
Big Tech reform is happening, but Washington won’t be the one to implement it. Congress can’t or won’t act, so people who want big tech companies to change their ways They are trying to do it through the courts.But it is not certain that the legal challenges will have a real and lasting impact.

3 things in business

Getty Images; Alyssa Powell/BI

Panic! On the job market. A weaker-than-expected jobs report has sparked fears of an impending recession, a nasty warning signal that the danger is much closer than we thoughtThis means that employees may have to prepare for abrupt layoffs and Say goodbye to that four-day workweek dream.
Uber is booming. After years of losses, The company reported better-than-expected second-quarter profits Tuesday. Its core business, ride-sharing, is booming, and its bets on delivery are paying off. Plus, Uber The advertising industry has reached an annual turnover of 1 billion dollars — and there is still room to grow.
Elon Musk’s war on advertisers has just reached a turning point. X sues group of advertisersaccusing them of violating antitrust law by boycotting advertising. The platform has lost billions of dollars in ad revenue since their departure.

In other news

What’s happening today

Publication of the Fortune 500 ranking of the world’s largest companies.
The first batch of China’s G60 Starlink satellites is set to launch today, a project that competes directly with the Elon Musk-backed US Starlink satellite.

The Insider Today Team: Dan DeFrancesco, deputy editor and anchor, in New York. Jordan Parker Erb, editor, in New York. Hallam Bullock, editor, in London. Annie Smith, associate producer, in London. Amanda Yen, fellow, in New York.