August 6, 2024

Double-O-data

Hi there, 

If you’re not familiar with the term agentic AI, it's time to get very comfortable with it.

AI agents — or LLM-powered bots that can independently reason and execute tasks — are poised to change many aspects of work in the enterprise.

CB Insights just broke down the agent landscape, the most promising use cases, and where the market is going in this new report based on our company data and conversations with customers.

We dive into the highlights below. 

The state of AI agents

Interest in autonomous AI agents surged in 2023. 

These AI systems can independently tackle complex tasks on a user’s behalf. 

While agents haven't fully taken off yet, the tech is evolving quickly and becoming more capable — with varying degrees of autonomy. 

We’re watching a proliferation of companies in the space, and funding in 2024 has already eclipsed all of 2023. Deals will smash through the 45 deals we saw last year.

Y Combinator has been one of the most active investors here, backing 12 startups.

Horizontal applications dominate

The landscape of VC-backed agent startups is dominated by a focus on horizontal applications.

And the vast majority of startups developing agents are targeting businesses, not consumers. They’re vying to replace the roles of SDRs, software developers, compliance analysts, customer service reps, and more. 

For example, Sierra, co-founded by former Salesforce CEO Bret Taylor, has raised $110M since its founding in 2023 to build customer service AI agents. 

This Sierra retailer customer is leveraging the company’s AI agents to deal with the “need to flex temporary teams during high volume periods.”

The performance of the AI agents for this task is already on par with humans. 

Big tech enters the fray

Microsoft, Google, and Amazon all have agent projects in motion. 

For example, Google’s DeepMind debuted Project Astra at its developer conference in May 2024. 

Project Astra is a “universal AI agent” that functions as a multimodal AI assistant, able to interact with users via video, image, speech, and text. 

Alphabet CEO Sundar Pichai described the project on the company’s Q2’24 earnings call as a “glimpse of the future”:

Trust issues

Despite the rising momentum, agents remain limited in their ability to execute tasks reliably across the internet and software apps. 

And lack of trust will be a big limiter to enterprise adoption — at least in the short-term. 

The concern is a common theme across our interviews with software buyers like this customer of 11x, which is building AI SDRs. 

The potential remains massive — a digital workforce would reshape how companies hire, scale, and interact with one another.

For more on how companies are tackling agent limitations as well as emerging industry applications and opportunities, download the full report here.

I love you.

Anand

@asanwal 

P.S. Our analyst is diving into what’s next for agents. Learn more on August 13.

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