The 'AI Gold Rush' Sparked by the ChatGPT Craze... 14 Trillion Won Raised in One Month

"The era of the 'AI Gold Rush' has begun with the advent of ChatGPT." Last year, the bubble burst in the virtual asset market and a storm of layoffs swept through Silicon Valley in the United States, but now Silicon Valley is experiencing an unexpected boom thanks to the generative artificial intelligence (AI) craze exemplified by ChatGPT.

According to PitchBook, a US market research firm, venture capitalists poured $11 billion (approximately 14.4 trillion KRW) into Silicon Valley AI startups in May alone. This represents an 86% increase compared to the same month last year.

Brendan Burke, an analyst at PitchBook, said, "Venture capitalists (VCs) are competitively investing in popular AI startups, leading to a strong concentration of AI investments, while reducing investments in relatively less profitable software companies."

Subrat Booshan, a CEO and AI expert formerly of Meta who founded a generative AI startup, recently raised $5.25 million (about 680 million KRW) from Sequoia Capital, a leading VC in Silicon Valley. Booshan explained that the fundraising was completed within a week of launching the investment round.

The Washington Post (WP) identified US semiconductor company Nvidia as the biggest beneficiary of the 'AI Gold Rush.' Nvidia, which has virtually monopolized the global AI semiconductor market, saw its stock price soar about fourfold from the end of 2019 to recently as market funds poured in on expectations of AI demand.

Recently, the company projected second-quarter revenue of $11 billion, three times the market consensus, and on the 25th, its intraday stock price surged 24% compared to the previous close. Nvidia's market capitalization reached $971.4 billion (as of the close on the 2nd), making it the first semiconductor company to approach a $1 trillion market cap.

[Image source=AFP Yonhap News]

Thanks to the AI craze, the Nasdaq market, which had been in free fall, also reversed to an upward trend. WP evaluated, "Wall Street declared the decade-long bull market of big tech was over, but thanks to ChatGPT's performance, it quickly reversed upward." The Nasdaq 100 index, composed mainly of big tech companies, fell 33% over the past year, losing about one-third of its total market capitalization and a significant portion of the wealth accumulated over the past decade, but it has risen 31% so far this year.