Each week we will share the latest artificial intelligence news and insights, curated for professionals, board members, and entrepreneurs, as we learn to navigate together the opportunities and threats arising from the evolution of AI and technology.
This week in AI
Welcome to AI Forum’s weekly report where we share AI news and insights, curated for students, practitioners, executives and entrepreneurs.
In this week’s report, we discuss the impact on fast growth Tech and AI firms associated with the recent failure of several US banks, and the latest funding news.
Impact on fast growth Tech and AI Firms
High growth technology firms rely on a pipeline of capital and associated services. Nowhere does this better than Silicon Valley…..until this weekend.
To introduce this week’s analysis, we start with some opening remarks from AI Forum’s Advisory Board Chair, Ian Gilmour, who previously worked in Risk and Treasury management for global banks including Deutsche Bank, HSBC and Standard Chartered.
So, how did Silicon Valley Bank, founded in 1983 and one of the survivors of the Great Financial Crisis, fail in such spectacular fashion ?
We asked Dr Howard Haughton, a senior visiting research fellow at King’s College London (and an expert in the structuring and risk management of capital market solutions), to provide some background to the failure:
“Basically, SVB did what most banks do which is to take short-term deposits and intermediate these (i.e., lend) into longer-term loans. They invested in mortgage-backed securities and US treasuries.
As rates went up the fixed income securities went down in value causing large losses. Such losses must be absorbed by regulatory capital. However, rumours seemed to have spread about liquidity and there was a run on the institution leading to solvency issues since the bank could not realise the sale of assets quickly enough to meet demands of depositors.”
Dr Haughton also commented on the UK technology scene:
“As far as the UK is concerned, many UK tech companies were unable to secure seed and venture funding. So it would seem that the growth of the UK tech sector, in no small part, can be attributed to US and Asian banks.”
Dr Haughton ended with this warning
“As US rates increase this could also increase the likelihood of more bank failures and contagion.”
So how do fast growth tech firms approach their bankers and mitigate the risks building up in the global banking system ?
To answer this question we turned to Madiha Mouchtak, Founder and Managing Director of Answer Inside, and an Amazon best-selling author. Madiha has worked on business rescues, transformations, and scale-up projects and is a distinguished member of AI Forum’s Advisory Board.
“This collapse serves as a stark reminder of the importance of businesses working on their resilience in the event of a bank collapse. If entrepreneurs had seen the insurance on their deposits reduced to just 250,000 US Dollars (in the USA) or 85,000 British pounds (in the UK), it would have been a nightmare.
It’s crucial for businesses to move slowly to avoid destabilizing the financial market, but also take measures to safeguard their assets and ensure business continuity.”
Madiha offers these five simple steps to protect enterprise assets and ensure liquidity:
1-Spread your deposits over different banks (up to the guaranteed amount)
2- Ensure that you have supportive suppliers
3- Build a game plan with employees for salary payments
4- Consider factoring to turn accounts receivables into cash faster
5- Get a revolving loan facility if your business is growing
AI Funding News
In this week’s funding news, despite the upheavals in US banking, it was a busy week with several mega deals, starting with Anthropic.
Anthropic is based in San Francisco, California, USA and we have covered their earlier funding rounds as the firm continues to attract global interest.
The firm reportedly raised three hundred million US dollars valuing the company at over four billion US dollars.
From a recent post on the company’s website they write about their mission:
“We founded Anthropic because we believe the impact of AI might be comparable to that of the industrial and scientific revolutions, but we aren’t confident it will go well. And we also believe this level of impact could start to arrive soon – perhaps in the coming decade.
At Anthropic our motto has been “show, don’t tell”, and we’ve focused on releasing a steady stream of safety-oriented research that we believe has broad value for the AI community.
We’re writing this now because as more people have become aware of AI progress, it feels timely to express our own views on this topic and to explain our strategy and goals.
In short, we believe that AI safety research is urgently important and should be supported by a wide range of public and private actors.”
Care Angel, based in Miami, Florida, USA raised Seven Million US Dollars according to a recent SEC filing.
IKTOS is based in Paris, France and was founded in 2016 by Quentin Perron, Nicolas Do Huu, and Yann Gaston-Mathé, with the aim of developing an innovative and user-friendly technology platform for deep learning-based de novo drug design.
The firm raised fifteen and half million Euros in Series A financing.
From Dr Nadiya Ishnazarova of M Ventures in their Press Release:
Care Angel is a digital health engagement solution, using AI in an Enterprise Smartcare Platform which includes their Virtual Nurse Assistant which is claimed to be “smart and dynamic, listens and learns”
“Shortening drug discovery cycle times and accelerating processes to clinical entry at lower cost has been a high priority for the industry and clinicians alike. We believe Iktos with its mature technology across generative AI and synthesis planning, and advancements in building fully integrated drug discovery platform has the potential to provide a competitive edge for the pharma industry as AI and ML becomes a core feature of R&D.”
Amelia is based in New York City, New York, USA. The firm secured a Private Equity investment of one hundred and seventy five million US dollars from Monroe Capital and Build Group.
The firm offers an Enterprise AI platform for conversational AI, AI operations and Orchestration. From their Press Release:
“Twenty years ago I was blessed to be CEO of Rackspace and help build the Company from $1.5 million to $1.5 billion in sales at the dawn of the internet age. We now find ourselves at the beginning of the AI age, and Amelia is the right company to lead this new market by helping businesses utilize AI to deliver greater outcomes to their customers. I’m thrilled to jump into the fray with Amelians, and I’m excited for what we have the opportunity to build together,” said Lanham Napier, CEO of BuildGroup.”
Pathos is a Healthcare AI company integrating data and “creating a self-learning and self-correcting therapeutics engine” for cancer drug discovery.
Based in Chicago, Illinois, USA, the firm raised twenty million US Dollars in venture financing according to their SEC filing.
From their website:
“Our PathOS platform is built on a modern data infrastructure and has the ability to continuously enhance the predictive power with every data point from discovery to development. Combining a data advantage, modern data infrastructure for clinical development and significant investment in AI development, we are creating a new level of automation in our reinforcing system that will continuously produce R&D advantages”
That’s all for this week. If you want to publish your news and Press Releases, email our news desk by Close of Business Thursday each week on newsdesk@ai-forum.com and to stay informed, visit our website ai-forum.com and click to subscribe.
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