Fintech
Most European AI founders had ‘no exposure to AI 18 months before ChatGPT,’ says European fintech chief
Many founders of European AI startups “just want to make money fast” and didn’t have access to the space 18 months before ChatGPT launched, according to a withering assessment of the space by one European fintech founder.
Christian Frahm is the CEO and founder of United Fintech, a fintech founded in 2020 that is looking to acquire and scale fintechs in the capital markets space.
When asked about United Fintech’s potential acquisitions in the AI space, Frahm said:
“We think the AI space is extremely critical to all of our customers, extremely critical to our business, we take it extremely seriously.”
But he added a note of caution, saying many companies are jumping on the AI bandwagon to “make money fast.”
He said:
“Space is tough right now because any time you have this amount of disruption in any space, you’re going to see a lot of early adopters, you’re going to see a lot of really skilled technical people building great businesses and great ideas.
“But unfortunately you also see a lot of people who aren’t necessarily super visionary, who just want to make money quickly.
“We struggle to find out who is developing core AI capabilities and who is leveraging large language models and adding some sort of interface on top of them.
“We’re finding that most of the space right now isn’t for actual money-saving or revenue-generating use cases, but rather for ‘me-too’ use cases.
Frahm said the AI space mirrors the rise of cryptocurrencies, with companies jumping into the space with little credibility.
Frahm added:
“We’re looking for a very small subset of people who are generally building long-term sustainable AI workflows around language models and not trying to dress them up as AI companies and that’s essentially, unfortunately, most of the space that let’s see today.
“We look at the backgrounds of the people building these companies, and most of the people who are now AI founders had nothing, no exposure to AI 18 months before ChatGPT launched.
“I think a simple way to look at it is ‘where were you involved in AI before the public launch of ChatGPT?’ That’s a pretty simple way to look at it. That’s how we see it today.
Generative AI has burst into the public consciousness 2022 when OpenAI launched ChatGPT. After just two months, ChatGPT had 100 million users,
London-based United Fintech has acquired a handful of fintechs so far, employing over 160 people across 8 countries. Acquired companies include Cobalt, FairXchange, TTMZero, Athena Systems and NetDania.
Institutional investors in United Fintech include BNP Paribas, Danske Bank and Citi.