Sapphire Ventures plans to invest over $1 billion in enterprise AI startups

By Krystal Hu

(Reuters) -Sapphire Ventures plans to invest over $1 billion in AI enterprise startups, doubling down on the technology’s adoption by companies across the world, its president Jai Das said at the Reuters MOMENTUM conference in Austin on Tuesday.

The $1 billion in capital will come from Sapphire’s existing funds, which have $10 billion under management and about $3 billion waiting to the deployed. The majority will be a direct investment in AI startups, while some capital will also go to early-stage AI-focused venture funds through its limited partner fund.

“AI is really game-changing because it’s impacting the way new software is going to be built,” said Jai Das at Sapphire. “This is not just a commitment in dollars, it’s also the commitment that we are going to build up the infrastructure within the firm to help AI companies be successful.”

Since OpenAI’s ChatGPT burst onto the scene late last year, generative AI technology that powered the chatbot has set an investment frenzy among VCs and big tech companies. Over $40 billion has been invested into AI startups in the past six months, accounting for nearly a quarter of overall startup funding, according to PitchBook data.

The investment waves collide with global enterprises actively looking for ways to adopt AI technology to increase internal efficiency and improve its products, with concerns over data privacy and safety on top of their minds.

With headquarters in Austin, Texas, Sapphire has invested in AI-powered enterprise startups including Clari and DataRobot. With a focus on software, it says it wants to back companies that are making AI easily accessible by leveraging data at hand to better predict outcomes.

“I think people who get the data first are probably going to be the winners of this generative AI wave,” Das said at the conference, adding access to proprietary data could be what sets a company apart in a tight AI race.