Jasper cuts internal valuation as growth slows

Jasper AI, a startup using AI to generate marketing content, has cut its internal valuation by 20% after raising funds at a $1.5 billion valuation in June. Jasper has seen its growth and valuation decline since OpenAI launched ChatGPT late last year.

What's going on here?

Jasper has cut its internal share price by 20%, indicating slowing growth since its last funding round.

What does this mean?

Jasper relies heavily on OpenAI's technology to power its product, competing directly with ChatGPT in providing AI writing assistance to marketers. Jasper has now told equity holders that the new value of their shares is about $3.34, down from more than $4.20 previously. Jasper also laid off staff this summer and has cut 2023 revenue projections substantially (up to 30%).

Some leaders have left Jasper already and founder Dave Rogenmoser is stepping aside, appointing Timothy Young as the new CEO of Jasper.

Why should I care?

Jasper was an early high-flyer in AI marketing tools, but OpenAI's launch of ChatGPT has disrupted its growth. It's a sign that generative AI startups need differentiation beyond relying on basic OpenAI models as ChatGPT drives down customer willingness to pay for yet another chatbot. This shows the power of AI products like ChatGPT or Claude where the companies behind them own the underlying models to fundamentally shift competitive landscapes.