The Valencia startup ecosystem has by no means missed the Artificial Intelligence train. Unaffected by the media chaos predicting widespread job losses today and a machine-induced apocalypse tomorrow, over thirty prominent Valencian startups are actively engaged in AI. As they say in the entrepreneurial world: Stay focused!
Startup Valencia is also actively contributing to ensure that, now that we have boarded the AI train, our ecosystem becomes an integral part of the leading carriages. The recent VDS highlighted AI as a global trend, with ‘Wired’ describing it as follows: “Artificial Intelligence is a global trend, and it has taken center stage at VDS2023. The selection of expert speakers was meticulous, featuring individuals like Vladimer Botsvadze from the US Artificial Intelligence Institute (USAII), Ruben Melkonian, CEO of Soilmate.ai, Karim Benchaaboun, Co-founder and CTO of Flowlity, and expert Bartosz Ziółko.” Valencia is also making its mark in the 2024 AI startup rankings, with InCaptur, based in Elche, listed in El Referente’s predictions.
One undeniable observation this year is that Artificial Intelligence is on everyone’s lips. It is an innovative force that transcends pure technology and, unlike previous phenomena like the metaverse, is here to stay.
Rubén Colomer, Co-Founder and GP at Next Tier Ventures, and an AI expert, emphasizes, “AI is not just a trend but has become an ongoing revolution that redefines the interaction between data, technology, and practical applications.”
Here are the main takeaways from 2023 on Artificial Intelligence and the unanswered questions going forward:
AI equals money, lots of money
PitchBook data reveals that over 200 AI and machine learning companies have raised at least $50 million this year. In a turbulent market year starting to clear up thanks to decreasing inflation, AI-related companies have been the major market disruptors in 2023.
Notably, NVIDIA, whose chips are coveted by any company setting up an AI platform, has seen a 200% increase in value since January. Microsoft, the investor and key ally of OpenAI (ChatGPT), has also risen more than 50% since the beginning of the year.
The company led by Sam Altman, who has been at the center of one of the most tumultuous episodes in the sector with his dismissal and rehiring, currently has nearly a hundred job openings available on its website.
In Europe, Mistral AI is a shining example. This French startup, with around twenty employees and operational since May, achieved a valuation of $2 billion after its latest funding round. A decacorn on the horizon.
AI is in ‘beta phase’
While algorithms and machine learning have been around for years, they were hidden from the public eye until the launch of the first version of ChatGPT. Now, AI interactions are accessible to anyone for everyday tasks.
This overexposure of AI has led to the ‘viralization‘ of errors or, worse, negligent uses such as deep fakes. In the best cases, these are part of the learning and trial-and-error inherent in any innovation. In the worst cases, they will serve to regulate fraudulent uses, protect those affected, and punish offenders.
AI amazes and scares in equal measure
The European law on Artificial Intelligence is the latest major development in 2023. For some, it lays the groundwork for a regulatory framework, providing security to companies and users by establishing the rules of the game. For others, it’s a tool wielded by bureaucrats who don’t understand the technology and will only hinder the Old Continent in the race against the United States and China.
A complex balance, as echoed by Juan Luis Hortelano, president of Startup Valencia, in a Newsweek op-ed.
The era of AI is the era of data
Javier Oliver holds a Ph.D. in Telecommunications with a specialization in Artificial Intelligence. He is a researcher, a member of the Board of Governors of COIT Comunidad Valenciana, and the CEO of the Valencian technological holding Tyris Software, which includes, among other divisions, Tyris.ai. He is an authoritative voice in the field, and we have had a conversation with him to gain a better understanding of AI.
In his opinion, ‘we are in the era of data and data-driven companies,’ explains Oliver. “Just as the 90s were the era of computers and the 2000s were the era of the Internet and e-commerce, we are now in the era of data.”
Similar to the first digital transformation, companies must adapt to this new period. “All these eras are long-lasting periods. Any company that wants to endure must adopt organizational, structural, and operational changes… No one would understand a modern company that doesn’t want to computerize its accounting, sales, or marketing processes because we have already adopted it as a necessity. The same goes for data. Those who want to survive must have the foundations to do so. Most current companies looking to the future will have to go through a rigorous ‘data transformation‘ process before they can embark on powerful projects that will truly drive their businesses,” adds the expert.
“Within the data-driven company framework, the first step is to establish a data culture. This process must be holistic and involve all areas of an organization, from strategy, business, marketing, sales, operations, development… Everyone. From the most basic technician to the most prepared account executive. For example, a factory worker who fills out maintenance reports for a machine holds a significant key to the success of his company, and he should know it,” explains Oliver.
“In most cases, organizations will have to first solve basic problems, such as updating their data storage infrastructure (obsolete, not horizontally scalable, does not support high concurrency), their processing teams, etc. And this is something that cannot be achieved in a few months because it affects the entire organization horizontally. But it is necessary to become a data-driven company, and few dare to look in that direction,” argues the CEO of Tyris Software.
In his opinion, “people prefer to look at the Data Scientists’ team and AI… but they don’t realize that they need to first bring freshness and relevance to traditional systems departments. It’s the analogy of the car and the driver; before putting Fernando Alonso behind the wheel, you need to have a decent engine and the tires ready.”
10 Predictions on AI for 2024
Looking ahead, here are the predictions for Artificial Intelligence in 2024:
1. General increase in awareness of the need to become a data-driven company.
2. Initial steps toward a new digital transformation, with data at the center of everything, at all levels: strategy, sales, marketing, operations, manufacturing…
3. Increase in AI, Digital Transformation, and Data-Driven Companies training for executives.
4. Initial pilot projects on LLM and generational AI models that will provide a better understanding of what we are facing, the limitations of the technology, dataset limitations, and actions to maximize the return of AI.
5. Large companies will continue to enhance generative AI technologies and LLM, especially in NLP and conversational models. An example is Google’s Gemini project, published just a few days ago.
6. Governmental definition of AI governance laws, as seen in the EU.
7. General change in UX and UI as we have conceived them so far. Computers brought about a significant change. Then came smartphones and their responsive versions. Now, conversational AI is the big change, and there is much more to explore in this field.
8. Emergence of a large number of applications around this new form of information consumption and interaction with devices. It is a new paradigm of human-human and human-machine interaction that no longer relies on touch interfaces but on virtual and much more natural interfaces.
9. Revival of major telecommunications companies to facilitate data access and the training of generative AI models operating on Big Data. Large data transfers, anytime, anywhere, with many concurrent users. The promotion of so-called ‘federated’ data and ‘federated’ training will be emphasized to minimize the impact of high data transfers on AI model training.
10. Overabundance of AI-based products as part of the hype. Similar to other phenomena like greenwashing, substitute solutions will emerge that either do not truly apply AI or apply it to problems that can be solved through simpler methods, such as mere statistics or even basic rules. Many will seek to label their business as having implemented AI.
Investment, regulation, and the increase in initiatives related to the sector are clear signs of the Artificial Intelligence boom, an upheaval that many experts do not hesitate to qualify as the most significant revolution since the advent of the Internet. It’s a transformation that the Valencia ecosystem is actively working on to be a fundamental and leading part of the major advancements that lie ahead.
