By Yulia Pivovarova, COO of Just AI and jury member of the Conversations startup track
The popularity of ChatGPT and other solutions from major IT corporations creates the impression that the generative AI market is already divided and conquered. Due to the massive investments required to build LLM models, the news typically features large companies or individual startups that were "lucky" enough to be at the forefront and secure millions in funding. In reality, this is just the tip of the iceberg visible to users.
In 2024, investments in startups using generative artificial intelligence nearly doubled (+92%) compared to 2023, reaching $56 billion. While in monetary terms, significant investments went to well-known companies in this space, the majority of deals involved startups that seamlessly apply available LLMs in their GenAI solutions for content analysis and generation, intelligent database search, customer support automation, tutoring in training, education, and other tasks.
I spoke with participants of the Conversations 2025 conference on generative and conversational AI about what is currently happening in this market, including in Russia.
How the Market Works
Perhaps the most well-known company on the market is OpenAI, which developed the ChatGPT chatbot. It continues to improve its LLM model, releasing versions that can combine different types of content. In March this year, OpenAI received $40 billion in investments with a $300 billion valuation. Almost all major IT companies are developing their own GenAI models, as well as new "stars" like DeepSeek and Midjourney.
Startups are trying to create unique solutions in their niches based on popular LLMs. There is room on the market — in 2024, according to PitchBook, 885 investment deals were made in the generative AI space.
These are not always large companies like OpenAI. At the conference, Pavel Belov shared the story of the international project GPT4Telegrambot. His team launched a chatbot for working with neural networks in Telegram just a couple of months after the ChatGPT release in 2023. According to the developer, the bot is now used by 25 million people worldwide with 1 million DAU traffic. This case shows that speed of execution, not just an original idea, is a critical success factor for startups in the technology race.
In Russia, the investment market is much weaker: across the entire AI and ML space, there were only 44 deals worth $33 million in 2024. This does not mean the market lacks potential — according to Statista, the GenAI market in Russia will reach $780 million in 2025, but startup challenges are linked to the specifics of venture capital in Russia.
As explained by business angel and Cats.vc Investment Director Elena Kolmakova, GenAI is a young field worldwide, and in Russia, early-stage startups are traditionally less mature than abroad. Young companies here do not receive substantial financial injections; early-stage startups are supported only by business angels, of whom there are few in the country, and checks are relatively small. As a result, even for modest investments, a startup must demonstrate traction, such as generating first revenue.
Nevertheless, some emerging Russian companies are already doing business in the tens of millions of dollars and plan to grow by an order of magnitude. According to statistics from conference organizer Just AI, out of 43 startups that passed the selection funnel, the largest group of 9 (21%) works in customer service. Seven young companies work in HR Tech, and four each in marketing niches and general productivity enhancement.
What Startups Are Doing
As noted by Sk Capital Investment Manager Alexey Filippov, the most discussed topics at the conference this year were production agents, multi-agent systems, and KPI-driven integrations: from AI assistants to specific projects in medicine, industry, and real estate where generative AI is already tied to P&L and specific business metrics.
Among the participants were startups from completely different fields, yet all of them are striving to integrate GenAI into business operations.
Barriers to Development
International and Russian generative AI markets continue to grow, so there is room for startups. According to Statista's forecast, the Russian GenAI market will grow by 40% annually and exceed $5 billion by 2031.
Prospects for Russian Projects
Generative AI enables faster and cheaper business processes. According to Filinkov from Avito, the first experimental GenAI product launches in 2024 already generated 670 million rubles in annual revenue. This motivated the company to develop a technology investment plan of 12 billion rubles through 2028.
Filinkov noted that one distinguishing feature of Russian GenAI startups is the availability of local installation options (on-prem or private cloud). This is an important condition for market entry.
Meanwhile, when domestic startups offer cloud solutions, they are ready to export current data or code to the customer. As a result, clients need not fear vendor lock-in or startup acquisition — they can always continue developing their project independently.
i-Free Partner Dina Popova believes that the strong sides of Russian GenAI startups are a powerful engineering school, as well as the ability to quickly bring products to market and respond to customer needs. The main challenges are a rapidly changing market landscape and the constant strengthening of cutting-edge language models.