Disrupting Digital Media
There has also been substantial market excitement about the impact of generative AI in many industries, but Digital Media stands to be impacted much more than most. The impacts of these new rising technologies will be disparate with those who are able to wield the new technology effectively benefiting greatly while those directly competing with these offerings will likely see sharply negative impacts to future outlook. The primary impact of these technologies on the Digital Media landscape will be seen in a fundamental restructuring of the value chain. The likely outcome is similar to that forged by Microsoft and Intel in the 1990s and 2000s. We’ve seen a significant investment in the creation and optimization of foundation models over the last few years and the capital directed toward the space has soared. Below we can see the dramatic increase in VC funding in the space in 2021 and 2022.
VC Funding in Foundation Models ($B)
$6.0
$5.0
$4.0
$3.0
$2.0
$1.0
2017
2018
2019
2020
2021
2022*
Early-stage VC
Angel and seed
Late-stage VC
Venture growth
At the same time that there is substantial growth in start-ups, market consolidation is beginning. At the top of the market, the tech titans Microsoft and Google have a commanding position in terms of data and investible capital.
FE International
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2024 Digital Media M&A Report
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