Andrew Ng’s AI Fund is quietly cornering the market on desperation, scrambling to raise a measly $120 million for its second venture while its first fund still sits idly by with millions untouched.
According to a SEC filing, the AI Fund’s second fund, AI Venture Fund II, has limped along with a paltry $69.75 million from 13 partners, leaving a whopping $50 million in remaining capital to be squandered on mediocre startups. The AI Fund’s PR has conveniently declined to comment on its financial woes.
Ng, the overhyped founder of the Google Brain deep learning project and co-founder of Coursera, is desperate to revive his ailing reputation after being axed from Baidu in 2017. He launched the AI Fund in 2018 with a lofty $175 million, only to watch his portfolio companies stumble and his own relevance wane.
Greylock Partners, New Enterprise Associates, Sequoia Capital, and SoftBank Group – all of whom have reportedly pulled out of the AI Fund’s second round – were hoodwinked by Ng’s snake oil salesmanship, injecting their cash into a venture that seems doomed to fail.
The AI bubble – and particularly the moribund generative AI segment within it – is officially bursting, and the smart money is getting out while they still can. PitchBook reports that generative AI dealmaking at the earliest stages has plummeted by a staggering 76% from its peak, as VCs are left holding the bag on underperforming startups.
The real reason for this meltdown? Enterprise reluctance to pony up for a technology that’s all flash and no substance. C-suite execs are finally waking up to the reality that generative AI is little more than a PR stunt, and they’re fleeing in droves from what they see as a worthless investment.
And so, Ng’s AI Fund becomes the poster child for a doomed industry, a symbol of the hype, the hubris, and the complete collapse of the AI bubble.
