With Amazon's launch of Bedrock, a suite of generative AI tools for its cloud business, the AI horse race continues to gain speed, and there's no denying the obvious: Generative AI has captivated investors' attention.  

The tech giants are choosing their mounts, and a select few startups have been given launchpads. Amazon has picked Anthropic's Claude and Stability.ai's Stable Diffusion to serve as foundational models. In January, Microsoft turned heads when its plans to invest an unprecedented $10 billion in ChatGPT creator OpenAI were reported.  

It's all indicative of a larger trend: Despite mounting pressure on venture capital in a difficult economic environment, money still pours into generative AI startups.

Roughly $1.7 billion was generated across 46 deals in Q1 2023, according to PitchBook data. An additional $10.68 billion worth of deals were announced in the quarter but have not completed.  

"It's not a crowded market yet, but it is getting more competitive," said Lu Zhang, the founder and managing partner of VC firm Fusion Fund. During Q1, Fusion Fund invested in two generative AI startups in stealth mode that raised seed funding between $5 million and $15 million.  

"The barrier for entry is still quite low," she added.

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