Otherwise, San Francisco has already made it official, overtaking New York in the billionaire race, with 82 billionaires to New York’s 66. The accelerated build-up of artificial intelligence (AI) startups has coursed this wave. Their skyrocketing valuations have produced huge new paper fortunes — and in record time. Now companies like Anthropic, Safe Superintelligence, OpenAI, and Anysphere have risen to become cornerstones of this revolution.
The recent $9.9 billion valuation of Anysphere, following a June Series C funding round, is indicative of this trend. According to news reports, the startup received a jaw-dropping acquisition proposal pegged at an $18 billion to $20 billion valuation. If these numbers truly hold up, their 25-year-old founder and CEO, Michael Truell, should soon join the billionaire ranks. We can’t wait to see what heights his future success will take!
OpenAI has been a major player in this wealth creation. The organization has in fact entered into exclusive negotiations on a potential share sale to investors. With this new deal, the company is on track to be valued at $500 billion. That’s a huge jump from its last valuation of $300 billion back in March. Mira Murati, OpenAI’s Chief Technology Officer, departed the company last September. In February, she founded Thinking Machines Lab, further shaking up the sector’s dynamic changes.
The pocketbook pressure on AI startups is apparent! As a result, they’ve produced 498 of these so-called unicorns — private companies valued at $1 billion or more — and collectively, these unicorns are worth a staggering $2.7 trillion. Just this year already, newly minted billionaires have abundantly filled the pockets of dozens of new AI startups. Dario Amodei and the other six founders of Anthropic have gotten amazingly rich. They’re probably each multibillionaires already, due to the intense runups in their companies’ valuations.
The surge in wealth creation is unprecedented. As of the writing of this post, there have been 73 liquidity events in 2023. These transaction types—mergers, acquisitions, initial public offerings (IPOs), reverse mergers, and corporate majority stakes—have all contributed to accelerating this trend. There are currently more than 1,300 AI startups valued at over $100 million, highlighting the awe-inspiring potential of the industry.
Andrew McAfee, an expert on technology and its economic impacts, remarks on this phenomenon:
“Going back over 100 years of data, we have never seen wealth created at this size and speed.” – Andrew McAfee
This disproportionality is paradoxically, although not coincidentally, reflected in the recent increase of the Bay Area’s millionaire population which has doubled in the last ten years. By contrast, New York’s millionaire growth is a mere 45%. Collectively last year, Silicon Valley-based companies raised more than $35 billion dollars in venture funding. This growth is a testament to the overwhelming investor demand for AI technologies.
“It’s astonishing how geographically concentrated this AI wave is.” – Andrew McAfee
McAfee asserts that the region continues to maintain its dominance:
Investment practices of the nation’s highest net worth individuals have changed to adapt to volatile market changes. Simon Krinsky notes:
“The people who know how to found and fund and grow tech companies are there. I’ve heard people say for 25 years ‘This is the end of Silicon Valley’ or some other place is ‘the new Silicon Valley.’ But Silicon Valley is still Silicon Valley.” – Andrew McAfee
AI is actively remapping the economic landscape. It’s no wonder that this technology is producing wealth creation at an unprecedented rate. For every new startup and VC-funded round, billionaires are being created at record speed.
“After people were beaten up or bruised up in the early 2000s, they came around to appreciating some degree of diversification and maybe hiring a professional manager to protect them from themselves.” – Simon Krinsky
As AI continues to reshape the economic landscape, it remains evident that wealth creation driven by this technology is happening at an unparalleled pace. With each new startup and funding round, billionaires are being minted faster than ever before.