The head of one of India’s most successful tech start-ups has a founder caution for anyone thinking about building a new business: “Be careful where you get your money. ” Prukalpa Sankar, 30, the co-founder and chief executive of Atlan, has spoken recently about the “frothy” times we are living in for investments. “There is a huge amount of excitement about A.I., but yet the financial markets are in this sort of hysteria which they may all come to regret,” she said.
Sankar believes the technology and AI hype itself is the real deal. She described it as the “largest transfer of wealth that we’ve seen in our lifetime,” and said that over time, it will upend nearly everything about how we live and work. But she cautioned that the approach people are taking to invest in it as of now is kind of a bubble. She encouraged other founders to think long and hard about money strategy, funding risk and focus on building a real business, not just following a trend.
Who is Actually Making Money
Cutting closer to the bone, there is Sankar’s breakdown of where exactly that money is going. Even while computer tasks are getting more complex, the companies creating the main AI models frequently aren’t even making any money. That’s because it is so expensive to operate these systems. About 96% of all the money earned from new AI tech is pocketed by just a dozen companies, she noted.
The result is a strange world in which thousands of smaller companies are scrambling to work really hard, except that most of their revenue ends up being funnelled right back to the giants that own the main technology. Sankar thinks this is an “atypical ecosystem” that founders have to get their eyes wide open before they jump in. Instead, she proposes that entrepreneurs stop and think about solving real problems that businesses are willing to pay for sustainably; rather than simply tacking on “AI” onto their pitch to land easy money.
Consolidation and the Path Forward
As the industry matures, we’re seeing a “normal cycle” where larger companies are beginning to acquire smaller ones. Here, said Sankar, you either “earn the right to consolidate” others by winning or you eventually get acquired yourself. That is already happening with huge deals struck by companies such as Google and Snowflake in the past year.
Atlan itself has become a big success story, having so far raised more than $206 million and is valued at around $750 million. Sankar has grown her company through these cycles, and so she holds a lot of sway in the startup world with her advice. Her overall message is a simple one, that the technology is game-changing, but the financial markets are getting a tad carried away. Disciplined and value-driven founders are the ones who will stand once the original hype dissipates.
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