Greymatter

Jason Risch | Three Trends in VC-Backed Cloud

Apr 27, 2023

Exploring the rise of AI/ML, vertical specialization, and security in VC-backed cloud technology. Delving into AI model architecture, enterprise adoption, industry-specific clouds, and cloud security. Highlighting funding trends, challenges in security data management, and market outlook for the cloud sector.

13:37

Episode guests

Jason Risch

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Episode notes

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Quick takeaways

Key takeaway 1: AI/ML integration in cloud technology is rapidly advancing, with startups focusing on smaller early-stage investments and partnerships with major players.

Key takeaway 2: The trend of vertical specialization in the cloud industry is growing, offering tailored solutions to specific verticals like banking and emphasizing the importance of data security.

Deep dives

Trend one: The Rise of AIML and Cloud

The podcast discusses the significant impact of AIML within the cloud ecosystem, highlighting major advancements in AI technology such as foundation models like Dolly and Chat GPT. Companies are focusing on developing core foundation models, middleware services, and applications on top of AI technology, creating layers similar to those in cloud computing. Startups are leveraging AI advancements to disrupt established players, offering opportunities across various layers of the AI ecosystem.

Introduction

4min

Trends in AI Model Architecture and Enterprise Adoption

2min

Two Trends in Cloud Computing Innovation

2min

Emerging Trends in Cloud Security and Funding

2min

Challenges in Security Data, Funding Trends, and Market Outlook for Cloud Sector

2min

Audio version of Greylock investor Jason Risch's essay "Three Trends in VC-Backed Cloud." As part of our Castles in the Cloud project, which maps the activity in the venture capital-funding startup ecosystem with that of the Big 3 Cloud providers, we compile a database of fundraising at the end of each calendar year and identify trends. Although 2022 and the first part of 2023 has been marked by notable advancements in cloud technology – mostly via AI integrations – there is still considerable restraint in today’s venture capital-backed ecosystem. That figure doesn’t translate to lower activity, however. Many venture capital firms report they are just as busy as prior to the market correction, albeit with a focus on smaller checks for early-stage companies. Technological advancements, partnerships between major powerbrokers, and vertical specialization are all components of the current wave. The top three trends for this period are the rise of AI/ML in cloud, Vertical specialization (or, industry clouds), and security.

You can read this essay here: https://greylock.com/greymatter/three-trends-in-vc-backed-cloud/

You can view the entire Castles in the Cloud project here: https://greylock.com/castles/

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