Well-funded software startups are springing up to target the enterprise market with generative artificial intelligence technology of the type popularized by ChatGPT. In 2022, global venture-capital investors parked $1.3 billion in more than 78 generative AI startup deals, according to PitchBook Data. That’s nearly as much as the combined capital investment in other tech startups over the past five years, and it came at a time when the broader investment sector was experiencing a slowdown, PitchBook found. Two of Q4’s biggest venture deals were for the generative AI startups Jasper, based in Austin, Texas, and Stability AI, headquartered in London.

Jasper AI, a content-generation platform focused on marketing and promotions, announced in October that it secured $125 million in Series A funding for a $1.5 billion valuation, while Stability AI, parent company of Stable Diffusion, raised $101 million seed round that same month, and is now teeing up another round with a target valuation of $4 billion, reports Bloomberg.

“That it’s going back to market so soon amid a tech downturn at a much richer valuation underscores how artificial intelligence in recent months has become the hottest topic in Silicon Valley, with the potential to upend entertainment, finance and even education,” Bloomberg says.

Stable Diffusion competes with ChatGPT, a free AI chatbot launched by San Francisco software startup OpenAI that following a November launch broke records for fastest-adoption of a consumer app when it drew more than 100 million users in January, UBS Group noted.

OpenAI is developing paid subscription versions of ChatGPT for enterprise customers, and others are following suit, as the humanlike conversational abilities of ChatGPT and other natural language-recognition applications grabs the attention of corporate technology leaders and investors.

“Generative AI has crossed an important threshold in the last year. It has gotten very good at many of the tasks that knowledge workers perform in every industry,” Bret Greenstein, a partner at consulting firm PricewaterhouseCoopers, told The Wall Street Journal, which writes that “the global generative AI market is expected to reach $109.37 billion by 2030.”

The Verge provides a rundown of noteworthy contenders in the AI race, starting with Microsoft, which invested a reported $10 billion in OpenAI, integrated ChatGPT into a new iteration of search engine Bing, and “also built AI-powered tools into the Edge browser.”