Why The Unity IPO Is Good For AI Startups
When you want to train a machine learning model to discriminate between pictures of dogs and cats, you can show the model thousands of examples per minute because it’s all digital. If you want to train a robotic arm, using a machine learning model, to set a table, you can’t do it nearly that fast. Every iteration is governed by the laws of physics in the real world, and so having a robot do that tens of thousands of times may take way too long.
One way around this is synthetic data. If you create a virtual world that is similar in its physics to the real world, but where you can do thousands of iterations very quickly, you can augment your real world training set and get better performance. And one way to create a virtual world is by using a gaming engine like Unity. There are a bunch of other benefits to synthetic data that I won’t go into here, except to say that Unity has embraced the use case.
The more important point for AI startups is that this is just beginning. There are a few trends in Unity’s favor that are happening in AI that will drive Unity to grow and provide opportunities for startups to build on top of Unity.
- As rendering things in gaming engines improves, the use cases will improve along with it. Synthetic data becomes more valuable.
- As use cases for Unity grow, the businesses you can build by creating things for synthetic worlds are going to increase. One way to think about it is, it was hard to create a social game before Facebook. Once Facebook grew big enough, leveraging Facebook to build a social game became a thing. That will happen with Unity and synthetic data/media of all types.
- Unity could be the basis of the metaverse. If you think about a virtual world where systems connect, bots perform tasks, and humans can pop into and out of, it can go way beyond Second Life. It could get to the point that it seems and feels almost real. Unity could be the layer that drives a lot of that.
So as venture capitalists, we are excited for the Unity IPO. We believe the market opportunity is still nascent, and that Unity has a long path ahead. More importantly, we believe that, at current scale and size, you could now start and build $100M revenue businesses on the back of Unity. If you are looking at an opportunity to build something like that, we hope you will let us take a look.