AIGC winter is coming

Estimated read time 5 min read

These days, a message through all of my friends, that is Amidst the global buzz around artificial intelligence, it came as a shock when a company with a worth of 1.5 billion USD and widely acclaimed as the quickest rising AI unicorn in 2022, announced redundancies.

Jasper, the United States’ AIGC unicorn, had its founder, Dave Rogenmoser, unveil on LinkedIn on July 12th that the company would be initiating layoffs in response to rapid industry changes and to reallocate resources.

Success of Jasper

Jasper, which was established in 2021 and secured a funding of USD 125 million in October last year, boasted revenues of 40 million and 75 million USD over the last two years. Despite this, the founder’s layoff announcement provides some insight into the current predicament.The announcement pointed out that the AI landscape had evolved dramatically over the previous year, making it increasingly challenging to satisfy the growing demands, despite Jasper servicing numerous firms. The realization dawned that the company had to recalibrate the team to optimize actions, which unfortunately led to the elimination of some roles, impacting a significant number of early employees. Despite the difficulty of this transition, it was seen as necessary for Jasper’s long-term development.Rogenmoser, the founder of Jasper and the orchestrator of the layoffs, concluded his announcement by expressing gratitude towards all contributing employees, promising to aid them in finding suitable job replacements.

Attempting to summarize the roller coaster ride detailed in Dave’s announcement, it can be simplified to an internet slang phrase: “The company stands at a critical juncture, and needs to consolidate its resources for key battlegrounds.” However, this minor contraction has had significant implications for its employees.It’s perplexing to note that despite its recent hefty funding and two successive years of high revenue, Jasper, an AI unicorn, has opted for layoffs as a strategy for accelerating research and development.


The apprehensions about Jasper’s future stem primarily from their core product, Jasper.AI.Developed based on the GPT3 model, Jasper.AI is an AIGC product specializing in copy creation.
It offers over 60 writing templates for various use cases, supports over 25 languages, and is integrated with tools like Grammarly to detect plagiarism and correct errors in generated content, evolving from an advertising tool to an AI content platform.
The unique proposition and robust business prospects of Jasper.AI helped secure a 125 million USD Series A funding led by Insight Partners in October 2022, boosting the company’s worth to 1.5 billion USD, 18 months post the launch of Jasper.AI.
However, the landscape changed dramatically on November 30, 2022, with the launch of ChatGPT. Its offering of free services and accumulation of over a million users within five days of launch dealt a significant blow to Jasper.AI. Even the introduction of a paid version of ChatGPT Plus was still much more economical than Jasper.AI, causing many users to make the switch.The unveiling of GPT4 soon after, buried Jasper.AI’s shallow competitive advantage, relegating the former AIGC star to the brink of extinction.
As a result, Jasper’s website traffic declined nearly 40% within three months.


Industry insiders surmise that despite the company’s current economic situation appearing positive, they must resort to austerity measures to ensure survival until they discover a new growth avenue.Similar dilemmas are being faced by dozens of products and start-ups based on the GPT model or similar offerings by tech giants.

These entities must either adapt and find unique product advantages or be forced out of the market in this highly competitive landscape.

  1. Rapid Pace of Technological Change: The case of Jasper.AI’s struggles illustrate how quickly the AI field evolves. Jasper.AI was based on GPT-3, but GPT-4 was released in less than a year. The pace of technological progress can make it difficult for companies to maintain their competitive advantage unless they are on the cutting edge of technology.
  2. Business Sustainability: Relying solely on a single AI model or technology can be risky. Diversification of technology offerings and constant innovation is key to a sustainable business model in the AI domain. For instance, companies could look at a combination of AI technologies across NLP, Computer Vision, and others, to ensure resilience in the face of rapid technological advancements.
  3. Market Monopolization: The entry of tech giants in the AIGC space can prove to be challenging for smaller startups. The extensive resources and user bases of these giants can overshadow the offerings of smaller companies, thus highlighting the importance of finding niche markets and delivering unique, high-quality services.
  4. User Privacy and Ethics: With AI-generated content becoming more prevalent, issues related to user data privacy, content credibility, and ethical considerations are paramount. Establishing robust policies and practices around these aspects can enhance user trust and brand reputation.
  5. Customization and Personalization: While the AIGC field has seen a surge in ‘generalized’ AI models, there’s a growing need for more customized solutions catering to specific industries or use-cases. Businesses that can provide highly personalized AI solutions could have a competitive edge.
  6. Collaboration over Competition: A collaborative approach could benefit smaller AI companies. Partnering with other firms for technology, user base, or resources could be a strategic move to withstand competition from larger players.

To conclude, the AIGC industry is a dynamic and challenging domain, but it holds tremendous potential. The key to success lies in the ability to innovate, diversify, and adapt swiftly to the ever-evolving technological landscape.

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