March 27, 2025

The big picture

Hi there, 

Here is this week’s Hot or Not.

Not: AI image generation startups that aren’t OpenAI

OpenAI just dropped image generation capabilities for GPT-4o — and they’re already live in ChatGPT and Sora, putting the rest of the AI image generation market on notice.

Early results are turning heads: the model can render photorealistic hands, generate legible text, and mimic cinematic styles.

The company has raised $19B+ in equity funding to date — dwarfing every other player in the space — and has a distribution advantage that most startups can’t touch.

Other image generators’ revenue figures remain modest. Even Midjourney’s $200M in ARR — which it reached without raising equity funding — is a fraction of OpenAI’s projected $12.7B in revenue this year.

For image gen startups without distribution, differentiation, or deep pockets, life just got tougher.

CBI customers can dive into the data on 10 AI image generators — including the Sutter Hill Ventures-backed Reve, which released its first model this week — here.

Hot: AI in India

The AI land grab in India is heating up.

OpenAI and Meta are reportedly in talks with Indian conglomerate Reliance to deploy their models locally — including running them in what could be the world’s largest data center. 

India has already become OpenAI’s second-largest market by user base (with users tripling YoY), and its employee headcount in the country has grown 67% in the past six months — nearly double its US growth rate, despite having no formal office there.

Other global AI leaders are also scaling up efforts:

• India is now Databricks’ second-largest talent hub. 
• Scale plans to hire thousands of contractors in the country to train AI models.
• Glean opened a Bengaluru office last summer, and India now represents over a third of its workforce.

Headcount growth isn’t the only signal — VC deals to India-based AI startups jumped 88% in 2024, as the country emerges as a key battleground in the global AI race.

Dig into the full report on India’s AI boom here.

Not: Humans shopping

Are the days of humans doing their own shopping numbered?

Yesterday, Amazon announced Interests AI, an AI shopping agent that will proactively help consumers find what they are looking for. Amazon has had “AI shopping” on the brain, mentioning it repeatedly on recent earnings calls.

As AI agents start handling product discovery, comparison, and purchase, it will recalibrate the commerce value chain in several ways:

1. First-party transaction data will define personalization. As personalization becomes more sophisticated at the awareness and consideration stages, companies with direct access to first-party data will have an edge. 
2. Direct-to-agent (D2A) commerce will kill traditional loyalty. AI agents will upend loyalty programs as agents optimize shopping across groups of merchants and types of consumer needs. 
3. A few AI agents will own the customer relationship. Companies like Amazon, Apple, and Google — with native AI infrastructure, vast transaction data, and built-in digital wallets — are positioned to dominate.

Explore each of these shifts in our Future of the Customer Journey report.

Hot: Billion-dollar startup exits

Billion-dollar M&A deals are back — and breaking records.

Q1’25 has already tied the all-time high for $1B+ startup acquisitions by count (11), matching the dot-com peak (Q1 2000) and the ZIRP boom (Q4 2020). 

But in deal value, it’s not even close. 

Thanks to Google’s $33B acquisition of Wiz, the quarter’s total has hit $54.5B — a 44% jump over the previous record.

AI is expected to drive more massive deals this year, with big bets ahead in drug discovery, data center cooling tech, coding agents, and humanoid robots. 

For more on what's next, see our 7 predictions for 2025 tech M&A.

The +1

Lost at sea. This chart looks a lot like my hairline. Translation: not good.

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. Are you attending InsurTech NY’s Spring Conference next week? CBI customers can get the low-down on the leading companies sponsoring or speaking at the event.

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