From the Tectonic AI Shift to the New AI Stack
Eyal Niv
Trends and Predictions for 2025
Pitango First’s latest report takes a deep dive into the evolving blueprint for AI architecture and explores how new developments are redefining the AI landscape We’re at a pivotal moment in AI, when innovation, massive capital flows and strategic shifts are converging to reshape the industry. As venture capitalists, we have a front-row seat for this dynamic and comprehensive transformation, with early insight into opportunities among both big tech players and spunky start-ups shaping the next generation of AI solutions. We are witnessing an explosive growth in AI infrastructure and the emergence of new technologies like small language models (SLMs), open-source options, and compound AI systems. Understanding these trends will allow better identification of emerging leaders of the AI revolution — those companies poised to capture value as industries adapt, infrastructures scale, and AI becomes integrated into every facet of business and technology. In the latest Pitango First report , we examine doubts on capital expenditures, identify trends and opportunities, and explore the next frontiers of AI. The topics covered include:
- AI model diversification and democratization
- Evolving deployment architectures for scalable AI
- Compound AI systems
- Innovations in training, inference and data consolidation
- Emerging trends in data architecture
- New tech infrastructure purpose-built for AI
- And more
In 2024 alone, over $48 billion was invested in AI companies (including mega rounds that reached $1 billion or more), with tech giants pouring billions more into related projects. The surge is primarily attributed to a substantial focus in AI infrastructure, including data centers and advanced hardware, to meet an escalating demand for AI capabilities.
Moreover, in the generative AI (GenAI) space, many of the startups making waves are raising funds at record-high, often triple-digit, revenue multiples. While this may reflect strong investor confidence in their future potential, it also sets a high bar — especially as many of these companies have yet to establish a clear path to profitability.
However, hovering just near the surface of the AI technology trends is an undercurrent of volatility that cannot be ignored. In a stark reminder of the market’s unpredictable nature, the Goldman Sachs US AI basket saw a sharp 21% decline between July and August 2024, casting shadows of doubt on the massive long-term capital expenditures being sunk into these technologies.
The report provides deep insights into these developments – including a comprehensive review of investments and where the smart money has gone – why they matter now, how they are redefining the AI landscape, and what it all means for forward-looking investors.
