“I do not think we have yet seen people with trillion-dollar ideas taking on Google, but that’s about to happen,” Open AI CEO Sam Altman stated in September last year, taking to Greylock partner Ried Hoffman.
Google management had to issue a code-red in a few weeks when OpenAI’s Chatbot gathered 57 million users within a month into the launch and 100 million by the second month, becoming the faster growing platform ever. There is a windfall of capital pouring into Silicon Valley for AI Startups in the wake of the paradigm shift brought by the rise of ChatGPT. OpenAI is burning money on an insane level, spending $3 million a month to run while still being valued at $30 billion by Microsoft.
1000 AI tools have been launched in the single month of March alone that are changing the landscape of research, media, management, finance, healthcare etc. OpenAI has also launched ChatGPT Plus for businesses and users willing to pay for access during peak hours as the tool was facing failures due to the high traffic. It also provides quicker responses and early access to new improvements and features.
“ChatGPT operates on a broad scale large language model, offers flexibility in responses, maintains context over multiple turns of conversation, can personalize the responses to user preferences and language patterns, and can bring a revolution in the way we interact with AI,” stated Fahad Malik Lead Product Manager at Meta.
Fahad is also working on a state-of-the-art social commerce platform Sadiq.ai that brings artificial intelligence to introduce sellers to create auto digital ads campaigns, product taglines, product descriptions, and more. He also pointed out that the potential for such a language model has always been there but OpenAI has taken the bold step of launching such a product for free.
In all of this, it’s only understandable to look at Pakistan’s startup space and see where we stand in Artificial Intelligence, what are the most promising names, what are the challenges, and where the potential lies.
Pakistani Startups and AI
Pakistani startups raised $347 million in 2022 in the face of a multitude of economic crises. In the first three months of 2023, startup funding in Pakistan recouped by 55 percent to $23 million compared to $15 million in the last quarter of 2022. However, on a year-on-year basis, the funding declined by a significant 86%.
Given Pakistan’s domestic economic turmoil coupled with the global monetary tightenings and interest rate hikes, the South Asian country is not the ideal frontline adventure for venture capital the way it was during the pandemic.
Although most of these six deals can be attributed to being made in 2022 and just announced this year with the bearish trends predicted to persist till the end of the year, there are still strong hopes that businesses would jump on the first chance to ride on this rise of AI brought by ChatGPT.
“Industries are not symmetric to macroeconomic trends. When it comes to AI, biotech and robotics, people take the bet for the future in these types of fields and ChatGPT is a very profound change in this space,” stated Faisal Aftab from Zayn Capital.
He pointed out that Zayn Capital is still bullish and will be adding further ventures into its portfolio.
There are nearly 92 startups in Pakistan deploying Artificial Intelligence in different ways of life from agriculture, retail, finance, and management (Tracxn, 2023). Adalfi is one of these companies in the fintech space which is an AI-powered credit scoring platform that helps banks to disperse smart and instant loans to consumers and SMEs, promoting financial inclusion across the board. Adalfi inked one of the biggest funding rounds of 2023 so far led by COTU ventures, Zayn Capital and others for $7.5 million.
Finance, Agriculture, and AI
Financial Services have been one of the top spaces to venture into for AI enthusiasts with ideas to solve problems.
“I use to file taxes through my lawyer and had a technical setback one day, that’s when I realized the need for a tool that can perform these tasks for me,” commented Umer from Indaraj, a tax advisory and compliance service startup that utilizes artificial intelligence to automate taxes, accounting & bookkeeping, legal & financial consultancy and even provide virtual CFO.
“Our upcoming portal will be able to compile whole financial statements in less than three seconds,” added Umer. He also highlighted that with ChatGPT offering their top AI engine for free, people now have seen the success stories of AI are more willing to take the next step.
Agriculture is one of the biggest sectors of our economy, has been since ever and probably will be for the foreseeable future. Farmdar which is offering AI-enabled analytical solutions for farming communities across the country. From soil analysis to crop health monitoring using satellite imagery and artificial intelligence, Farmdar is shaping the future of farming in Pakistan.
“Crop and Weather Advisories through traditional social channels will soon be obsolete with ChatGPT coming in. It will also ensure swift product development with its programming abilities which can do the hours-long task in minutes,” stated Muzaffar Manghi, co-founder of Farmdar.
He also pointed out that the recent popularity of AI tools will add to the investors’ trust in these technologies as they cut marketing costs and turn businesses more efficient and productive. In education, we already have Orbit-ed providing AI-assisted 3D learning and employee training for quite some time now along with interactive VR experiences to turn education fun and engaging.
Nearpeer, another ed-tech platform just integrated education and pivoted GPT-4 version in their app to answer queries by students. It has successfully answered 500k+ questions with the majority of positive feedback. There are similar ventures operating in other areas of life as well.
There are some concerns that this AI craze will lead to a market bubble. “Indeed there are companies putting Artificial Intelligence front and centre for nothing except to lure investments and marketing,” commented Taimoor Hassan, Founder at QueryCity who has also sold multiple successful startups.
“It is only natural to expect such a bubble every time a new technology surfaces but the market will soon adjust itself,” added Faisal Aftab. He recalled the dotcom bubble to explain how some great companies came out of it as well despite the crash. On the other hand, It’s also a disturbing fact that despite all the talk of problems and possibilities, Pakistan might not be ready to tap the full potential of this emerging technology.
“The kind of services and mentorship provided by our domestic IT houses is ridiculous as they are just working as laborers to western clientele instead of product development and preparing solutions for the future,” commented Taimoor Hassan. He argued that we need to teach a lot more than technical skillset to our youth in order to develop this industry.
Another major challenge is the lack of available data to train the AI models in order to make them better and worth the investment of time and capital. In developed countries, you often have population data available centrally from educational preferences and healthcare to financial behavior and lifestyle and that comes in handy in developing AI tools.
Pakistan is still in the nascent stage of digitizing the government which is going to take the time and attention of an administration that doesn’t have a grave economic crisis at its hand.
