With over 25% of American startup investments in 2023 going to AI companies (per Crunchbase), a whole generation of young entrepreneurs are ditching college to seize opportunities in the booming sector.
The launch of transformative AI models such as ChatGPT and Bard has ignited a surge in investments and the establishment of new AI-driven companies. The generative AI market alone is estimated to be worth $43 billion for enterprise technology AI in 2023, as reported by PitchBook. This rapid growth has enticed young founders to abandon their college classrooms and embark on entrepreneurial journeys, according to the Wall Street Journal.
Govind Gnanakumar, 19, recently made headlines after he left the Georgia Institute of Technology to devote his full attention to his AI startup, Automorphic. He's not alone in this endeavor, as a growing number of teenagers and twenty-somethings see the potential of the AI boom and are willing to take a leap of faith. Gnanakumar believes that Y Combinator's prestigious startup accelerator program offers education and experience equivalent to a traditional degree. At Automorphic, he's working on AI tools capable of answering intricate questions in specialized fields such as genomics and patent law. Gnanakumar's motivation is clear: he'd rather be on the side of automation than risk losing his job to it.
Venture capitalists acknowledge the drive and ambition of these young dropouts, but caution that many of their ventures may fizzle out. Building a successful AI company requires access to vast datasets and expertise in building and training AI models. While some students may experiment and fail, not having mortgages or children to support provides them with the freedom to take these risks.
"It’s the wonder of youth. You’ve got to love them," said Jeffrey Sohl, who leads the Center for Venture Research at the University of New Hampshire as well as a student angel-investment fund, and who acknowledges that most won't become household names.
"Not all of them can change the world."
Tech giants like Zuckerberg, Bill Gates, and Steve Jobs, who achieved tremendous success without formal degrees, have reinforced the notion that academic qualifications aren't the sole path to innovation and entrepreneurship, while the emergence of generative AI tools like ChatGPT has simplified the process of starting AI-based companies. Founders can now use AI to develop algorithms that previously required entire teams of engineers. This newfound accessibility has fueled the ambitions of young entrepreneurs.
20-year-old Kevin Lu, who left the University of Waterloo in Canada to focus on his company, Sweep AI, sees AI as a force that could replace many traditional jobs, including his own. He believes that embracing AI entrepreneurship is a way to stay ahead of the curve in a world where automation threatens various professions.
"By the time I graduate, I’m going to be replaced by AI," he says. "I’d rather be the one replacing people."
A recent McKinsey analysis suggests up to 30% of tech workers’ time could be changed by automation in the next decade. Eighty percent of workers are in occupations where at least one task can be performed more quickly by generative AI, according to research from the University of Pennsylvania and OpenAI, the company that makes ChatGPT. -WSJ
According to research from the University of Pennsylvania and OpenAI, 80% of workers are in occupations where at least one task can be performed more quickly by generative AI.
Hype? Vaporware?
The push into AI has also stoked calls for restraint, as concerns of overzealous branding and the use of 'all things AI' as a buzzword may backfire - and has prompted predictions of an impending shakeout in the AI startup space. Institutions have seen a surge in AI-related startup ideas, even when they may not necessarily require AI solutions.
"Everyone is trying to pass off their company as an AI venture," said Kartik Hosanagar, faculty co-director of a program at the Wharton School of the University of Pennsylvania focused on AI.
Despite these challenges, young entrepreneurs remain undeterred. David Zhi LuoZhang and Jeffrey Pan, both 20, leveraged their machine-learning knowledge from a graduate-level course to create Bronco AI, which assists executives in decision-making using business data. They left their university after securing their first investment and are now actively engaged in their startup.
"It’s hard to focus on your homework when you’re thinking about how you could run all the factories in America," said LuoZhang.
Jay Dang, 21, withdrew from the University of California Berkeley to establish FlowGPT, a generative AI applications company. Dang sees this decision as the best he's ever made, with FlowGPT now boasting a substantial user base and a valuation of $12 million after raising $2 million, according to the co-founders.
Dang says he now works 90 hours a week, something he couldn't do if he also had to deal with exams and classes.
And then there's plan B: "You can always go back to college if you fail."
