Digital Transformation as the Ultimate Vehicle for Investment in 2023

Claire Trachet, CEO & Founder of business advisory, Trachet, comments on the wave of excitement surrounding ChatGPT and what this means for generative AI and investor sentiment.

Digital Transformation as the Ultimate Vehicle for Investment in 2023

Although the economic outlook was less than favourable for 2023, as the tech sector experienced mass layoffs and valuations plummeted, January brought a wave of excitement for the sector: ChatGPT. The Generative AI platform continues to dominate headlines, as the sheer impact of the technological innovation will not only set a new standard for the world of tech and AI but will redefine the way people interact with technology based on the broad applications demonstrated by users around the world.

According to Claire Trachet, M&A expert and CEO/Founder of business advisory Trachet, it is crucial for enterprises to begin to identify parts of their business where this technology could potentially have an impact, not only for day-to-day operations but as a key component towards attracting investment in the current economic climate. Serving as a testament to this, 94% of businesses and IT executives said that AI is vital for their success in the next five years, according to a survey by Deloitte.

OpenAI has impressed the technology and investment communities with its successful AI offerings and the substantial $10 billion support from Microsoft Corporation – a deal that would value the AI lab at a staggering $29 billion. As a result, an increasing number of both large and small companies are exploring and adapting this technology, with it bringing a flurry of M&A and investment into the sector as the cost-reduction prospects bring a renewed outlook for tech investors.

Ignoring the potential of generative AI to enable large-scale content production, speed up the accuracy and speed of data science practises and app development, produce synthetic data for training AI and machine learning models, and offer new defence opportunities for security professionals would be “a big and expensive mistake,” according to Trachet. To put it briefly, generative AI offers the chance to improve upon and even automate current labour processes in IT, marketing, customer service, and other business activities. However, Trachet adds a word of warning: “the nascent nature of the technology will require executives to proceed with an abundance of caution.”

According to Claire, solutions like ChatGPT can change investor sentiment which generative AI will create:

“ChatGPT and other advanced AI technologies have already sparked innovation and investment in the field – however, the recent attention this has gained from the international community – outside of tech – will shed new light on the gloomy path to recovery laid out for this year.

“As these technologies continue to evolve and mature, it’s likely that they will drive even more innovation and investment in the future. Companies and investors are recognising the tremendous potential of AI to transform a wide range of industries and are eager to adapt and implement these to capitalise on the opportunity.

“There is now a growing number of investors who are sat on a dry powder pile having deterred investments in 2022. This means there are significant opportunities on the horizon, and now is the moment to prepare and get the deal ready as optionality will increase in H2 of this year.

“Indicators suggest early-stage startups will have an advantage in this current market, as growth investors are seeking to invest in earlier stages, from seed to series A, with smaller amounts of capital to sustain their businesses. These startups have a lower burn rate, giving them the potential to come out as dominant competitors if they can withstand the challenges. For these smaller startups, creating a low-cash burn, high return business model with the adaptation of generative AI, is key when trying to attract significant capital and M&A opportunities.”