Artificial Intelligence Factory, Data Risk, and VCs’ Mediation: The Case of ByteDance, an AI-Powered Startup

Peiyi Jia and Ciprian Stan
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Peiyi Jia: Robert J. Manning School of Business, University of Massachusetts Lowell, One University Avenue, Pulichino-Tong Business Center Suite 228, Lowell, MA 01854, USA
Ciprian Stan: Rinker School of Business, Palm Beach Atlantic University, 901 S Flagler Drive, West Palm Beach, FL 33401, USA

JRFM, 2021, vol. 14, issue 5, 1-19

Abstract: The AI factory is an effective way of managing artificial intelligence (AI) processes, enabling broad AI deployment in a firm. The purpose of this study is to explore the role of the AI factory in an entrepreneurship context. How do AI-powered startups leverage AI to grow, and manage data risks? What is the role of venture capitalists in this process? We answer these research questions by conducting an in-depth study of an AI-powered startup: ByteDance. Our study extends both AI and entrepreneurship literature by showing that AI-powered startups adopt the AI factory approach to optimize scale, scope, and learning. Our discussion also emphasizes the critical role played by venture capitalists in assisting AI-powered startups in building AI factories and in reducing data risk.

Keywords: artificial intelligence; scaling growth; AI factory; AI-powered startup; data risk (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
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