State of AI.

Latin America 2023

ALLVP Research Report

Introducing State of AI in Latin America

AI has emerged as a transformative force globally with the potential of revolutionizing industries
and driving tangible impacts across various sectors. However, Latin America still lacks a comprehensive
resource to foster high-level conversations about the state of AI in the region and its potential for growth
and innovation.

In response to this gap, ALLVP is pleased to introduce the State of AI in Latin America report. Our
research team surveyed a diverse set of stakeholders, diligently gathered the latest research in the field,
and conducted in-depth conversations with experts. The result is a panoramic view of AI trends, use
cases, and potential in the region.

As we navigate a rapidly evolving landscape, let this report serve as a vital guide for enthusiasts,
innovators, business leaders and investors to understand and harness the power of AI in Latin America.

Jimena Pardo & Federico Antoni

2
Agenda

01 AI primer: Unpacking the revolution

02 Startups: Leading the charge

03 Corporates: Tapping into AI’s potential

04 Venture capital: Integrating AI into the investment process

3
 ALLVP is on a mission to back formidable founders that solve the
hardest problems in Latin America.

Today, ALLVP is the leading and most selective early-stage VC fund in

the region through their boutique approach to venture capital setting
them apart as a highly selective, high-value-added, and high-impact
ALLVP is the investor. ALLVP invests in the next generation of great startups
reinventing Latin America’s cities, commerce, human capital, and
foremost early-stage financial services.
VC in Mexico As a firm, ALLVP has delivered the highest realized returns in the region
helping founders returning more than 3.3 times the capital raised, driven by our successful

win Latin America. exits, most notably that of Cornershop.

Led by a unique complimentary team, Jimena Pardo, co-founder of

Carrot carsharing and Facebook Product Growth Manager for Spanish-
speaking LATAM, and Federico Antoni, founder of the firm, a trailblazer
of the Latin American entrepreneurial ecosystem and Stanford GSB
lecturer, the firm stands out for their founder focus, discipline, and
conviction.
4
Acknowledgements
Presented by

With the support of

About the authors

Rick Prieto, Analyst Jimena Pardo, Managing Partner Federico Antoni, Managing Partner

Blanca Sañudo, Senior Analyst Natalia Couttolenc, Senior Analyst

5
01 AI primer.
Artificial Intelligence, Machine Learning, Deep Learning,
what is the difference?

Artificial Intelligence (AI) AI: The simulation of human intelligence processes by

machines, particularly computer systems.

Machine Learning (ML)

ML: Subfield of AI that gives computers the ability to learn
without explicitly being programmed.
Deep Learning (DL)

DL: Subfield of ML that uses artificial neural networks to

Generative AI model and understand complex patterns in dataset.

Generative AI: Algorithms that can be used to create new

content, including audio, code, images, text, simulations,
and videos.

Sources: Britannica, IBM 7

Technical glossary
Machine Learning algorithm that has been trained on data and can be used to make
Model
predictions or decisions based on new data.

Foundational Model Underlying models that can be fine-tuned for a variety of specific tasks.

Natural Language Subfield of AI that focuses on the interactions between computers and humans through
Processing (NLP) natural language.

Large Language Model Machine learning model that has been trained on a large corpus of text data, which aims to
(LLM) generate human-like text on the input it receives.

Series of algorithms that endeavors to recognize underlying relationships in a set of data

Neural Network
through a process that mimics the way the human brain operates.

Supervised Learning Type of machine learning where an algorithm learns from labeled training data.

Type of machine learning that looks for previously undetected patterns in a data set with no
Unsupervised Learning
pre-existing labels and with a minimum of human supervision.

Sources: Open AI, Stanford University, Britannica, IBM 8

AI has developed along three waves, evolving from rules-
based systems towards contextual adaptation

01
Handcrafted Knowledge
02
The Rise of Statistical
03
Contextual adaptation
(1950s – 1990s) Learning (1990s – 2010s) (2020s and beyond)
Good at reasoning, but no capacity to Good at learning, but struggle with Excellent at learning, reasoning and
learn or generalize. reasoning and adapting. adapting.

Rooted in rule-based systems, Grounded in statistical models, Founded on deep learning, evolving
encoding expert knowledge. learning from vast data sets. through interactions.

Manually programmed systems seek Automated systems drive a shift from Autonomous systems learn and
to imitate human reasoning. imitation to true learning. function with limited supervision.

● TurboTax’s rule-based system ● Alexa’s speech recognition ● OpenAI’s ChatGPT

● IBM’s Deep Blue ● Google’s AlphaGo ● Waymo’s self-driving car

Sources: DARPA’s Three waves of AI 9

Progress in computational power and data availability laid the
foundations for the AI revolution
Transistor count by microchip Volume of data created worldwide
Logarithmic scale Zettabytes

Sources: Our World in Data, IDC, Seagate, Statista 10

A critical research breakthrough enabled an acceleration into
AI’s third wave
Parameter count of ML Language models
Logarithmic scale In 2017, Google researchers
“Attention Is All You Need” published “Attention Is All You
is released
Need” and introduced the concept
of Transformers.

Transformers use all previous

words and their position to make
predictions, leading to a process
that is more parallelizable and
more accurate.

Thanks to this increase in

computational efficiency,
language models have grown
exponentially over the past few
# of parameters doubling every 3.4 years Doubling every years.
6 months
Sources: Jaime Sevilla et al. (2023), Arxiv.org 11
We are at an inflection point in which consumers and
businesses are starting to discover AI’s potential
Capabilities evolving Adoption reaching the Corporates embracing BigTech investing and
at unprecedented rate mass market with tangible results partnering with AI orgs

Score in bar exam Time to reach 100M users GitHub Co-Pilot results
Percentile Months Minutes to complete task and
completion rate
$13B investment

$300M investment

Partnership

Partnership

Sources: UBS, OpenAi, GitHub, Fortune, Press releases 12

The AI Stack provides a framework to understand the market
dynamics and opportunities to capture value
Users

01 Application layer
Apps with
Applications that integrate AI models into a user-facing
proprietary Apps without proprietary models
product, running their own model pipelines or relying on models
a third-party API.

Model Hubs
02 Model layer
Closed-source
Algorithms and models that process and learn from Proprietary
Foundation
data, and which power AI applications. They can be models Open-source
Models
proprietary or open-source. foundation
models

03 Infrastructure layer Cloud Platforms (e.g. AWS, Azure)

Hardware, software and cloud computing necessary for
creating, supporting and training AI models.
Computer Hardware (e.g. NVIDIA’s GPUs)

13
Sources: Leeway Hertz, a16z, Stanford
The race is on: several foundational models have emerged in
recent years and continue to evolve quickly
Language models

Image and video models

Sources: Jaime Sevilla et Al. (2023), Voicebot.ai, Fabian Mosele (2023). Note: Not exhaustive 14
Soaring demand for chips needed to train generative AI
systems helped NVIDIA reach a $1 trillion market cap
NVIDIA produces GPUs, chips with
NVIDIA hit a $1 trillion market cap in May ‘23
parallel processing capabilities and
NVIDIA vs. NASDAQ 5 year stock price evolution. Indexed to 100 in May 2018
high computational power critical to
train generative AI models.

NVIDIA projected $11B in revenue in

the next quarter, exceeding Wall
Street forecasts by more than 50%.

“We are significantly increasing our

supply to meet surging demand”
Jensen Huang, NVIDIA CEO

“In the age of AI, the real limitation we

face is the availability of processing
power”
Chris Miller, author of Chip War1
Sources: Thomson Reuters, NVIDIA Investor Relations, Chip War. Note: (1) 2022 Financial Times Business Book of the Year 15
Leveraging AI can accelerate value creation by enhancing
the value proposition and optimizing operating efficiency
Value proposition
How can companies enhance,
personalize and amplify their offerings?
01 Product R&D
● Improve or adapt existing products
● Develop new products
02 Sales & Marketing
● Fine tune customer targeting and
segmentation
● Enhance lead generation and conversion
03 UX & Customer Service
● Manage high volume of customer inquiries
efficiently and automatically
● Tailor interface based on individual
preferences and behaviors
Operating efficiency
How can companies build leaner, faster
and stronger?
01 Process Automation
● Automate tasks to reduce costs, increase
productivity and free up capacity
02 Predictive Analytics
● Predict future scenarios of customer behavior
03 Decision Optimization
● Analyze complex data sets to provide insights
that assist in strategic decision making
04 Risk Management
● Identify patterns or anomalies that require
preventive measures
16
AI has a wide range of use-cases across industries and
functions
Value proposition enhancement Operating efficiency optimization

Sales & UX & Customer Process Predictive Decision Risk

Industry Product R&D
Marketing Service Automation Analytics Optimization Management
Medicine Virtual health Billing & claims Patient health Treatment plan Regulatory
Healthcare Drug discovery
recommendation assistant processing outcomes optimization compliance

Financial Customer Credit risk Treasury

Fund selection Robo-advisors Loan processing Fraud mitigation
services segmentation modelling management

Consumer Personalized Online shopping Inventory Demand Assortment Shoplifting

CPG & Retail feedback collection campaigns assistance management forecasting planning detection

Multi-language Adaptive learning Automated Student Course Cheating

Education development
Targeted campaigns
paths grading retention scheduling prevention

Virtual product Repetitive tasks Maintenance Production Safety risks

Manufacturing Prototype design Pricing optimization
demonstration in assembly line prediction schedules detection

Recommendations Quality Cloud resources Resource Cybersecurity

Technology A/B testing Client clustering
based on use trends assurance forecasting allocation risks mitigation

Transportation Autonomous Optimizing freight Document Delivery time Weather risk

Shipment tracking Route planning
& Logistics vehicles rates processing prediction mitigation

Mobile plan Churn reduction Handling customer Billing Pricing changes Network
Telecom creation campaigns queries management impact deployment
Fraud detection

17
McKinsey estimates that Deep Learning and Generative AI can
create significant value across industries
AI’s value creation potential, by industry
% of industry’s revenues

Source: The AI frontier: Applications and value of deep learning (McKinsey, 2018), The economic potential of generative AI (McKinsey, 2023)
Note: Potential value uses the average between upper range and lower range, by industry and type of AI 18
Latin American users are embracing AI with greater
enthusiasm than the rest of the world
Respondents agreeing with the statement: “products and services using AI have more benefits than drawbacks”
% of people who agree, by country

Source: IPSOS and World Economic Forum – Attitudes towards Artificial Intelligence (2022) 19
“
Nothing in life is to be feared, it is
only to be understood. Now is the
time to understand more, so that we
may fear less.

”
Marie Curie, two-time Nobel Prize winner
Surfing the
AI tsunami
Gabriel Weintraub, PhD
The Amman Mineral Professor
of Operations, Information &
Technology at Stanford
University
We are facing an AI tsunami, and Latin America needs to surf it. The
pace at which AI technologies are emerging and evolving presents an
unprecedented opportunity for innovation and growth in the region.
Amidst this technological whirlwind, we must not forget the fundamental
principles of business: addressing vital problems and alleviating pain
points for users. In this context, both AI-native and non-AI native
companies must harness AI as a tool to create value by streamlining
productivity and improving the value proposition.
Value creation is critical, as is value capture, and the utilization of the "AI
stack" can serve as a useful conceptual framework for identifying
opportunities to capture value. In LatAm, developing the bottom of the
stack, the infrastructure and tooling, may be challenging. Instead, most
companies will benefit from shifting towards the applications layer,
potentially building upon foundational models.
21
Surfing the
AI tsunami
In this context, gaining a competitive advantage can be achieved through
proprietary data collection and maintaining control over user interactions.
It might even be worth considering going a layer deeper and developing
a foundational model specifically tailored to unique contexts, surpassing

“
the performance of generic models.

AI will be critical enabler to untap the potential of millions of Latin

Americans citizens, who today lack access to quality services, such as
Both AI-native and
education, healthcare, financial services, and logistics. My two wishes for
non-AI native
this generation of entrepreneurs are to continue focusing on high impact
companies must
and positive societal applications and to keep ethics and guardrails at
harness AI as a tool to
the forefront.
create value by
streamlining
productivity and As AI empowers this generation to experiment faster and at a lower cost,
improving the value I eagerly await a surge of startups and AI developments aiming to solve
proposition. Latin America hardest problems. Let’s ride this tsunami.
22
02 Startups.
Startups: key highlights

Today, 71% of startups use AI in daily operations, and 100% expect to use
AI in the future.

The main use cases for startups are: content creation (46% of startups),
interacting with users (39%), and personalization at scale (39%).

40% of startups report they are hiring teams to oversee the use of AI.

The main barriers to implementing AI are the lack of bandwidth (mentioned

by 46% of startups) and the lack of technical talent (38%).

24
A third of surveyed startups were focused on AI, signaling the
rising interest among entrepreneurs
What industry is your organization focused on?
% of startups

78%
of AI startups are B2B,
highlighting the market
opportunity in helping
other businesses adopt
AI to capture value.

83%
of non-AI startups
believe AI will be
important for their future
success.

Source: ALLVP State of AI Survey (2023) 25

While AI is a current priority and used daily, its relevance in
the future will only grow further across almost all startups
Is AI a board-level priority in your startup? Does your startup use AI in its day-to-day operations?
% of non-AI startups, today versus expectations in the future

Source: ALLVP State of AI Survey (2023) 26

The top 3 use cases for AI involve creating content,
interacting with users and personalizing at scale
Types of problems solved using AI
% of startups

54%
of AI startups focus on
one problem at a time,
while

76%
of non-AI startups use AI
to solve 2 or more
problems

Source: ALLVP State of AI Survey (2023) 27

Generative AI has become the most adopted AI technology by
startups, with dominant language and image models
Type of AI used Most popular generative AI models
% of startups

Language models

92% penetration¹
8 times higher than the
GPT-2/-3/-4 second most popular
model

Image models

33% penetration¹
2 times higher than the
Midjourney second most popular
model

Source: ALLVP State of AI Survey (2023). Note: (1) Among startups using Generative AI 28
76% of startups have the CEO or CTO leading their AI
strategy, and 40% report hiring teams to oversee the use of AI
Who leads the use of AI within your Are you hiring a team to oversee the use
organization? of AI in the organization?
% of non-AI startups % of non-AI startups

Source: ALLVP State of AI Survey (2023) 29

58% of startups expect most of their processes will be AI
embedded in the future
In what % of your startup’s processes is AI embedded today? How will this change in the future?
% of non-AI startups

58%
of startups expect
most processes
will be AI-
embedded, up
from 7% today.

Source: ALLVP State of AI Survey (2023) 30

Whereas 45% of startups consider AI as core when pitching to
VCs, only 22% report receiving help from investors to deploy AI
Is AI a core part of your value proposition when you pitch to potential investors?
Are your investors helping you deploy AI within the organization?
% of non-AI startups

Source: ALLVP State of AI Survey (2023) 31

Startups frequently cite lacking bandwidth and technical
talent as bottlenecks to deploy AI
What are the three biggest bottlenecks to deploying AI in your organization?
% of non-AI startups

Source: ALLVP State of AI Survey (2023) 32

Nevertheless, the number of STEM graduates in Latin America
continues to narrow its gap to the US
Graduates in STEM fields in selected Latin American countries and the United States
Thousands of graduates

Source: OECD. Note: STEM includes 1) Natural sciences, mathematics and statistics, 2) Information and Communication 33
Technologies, and 3) Engineering, manufacturing and construction
Data privacy, regulatory compliance and cybersecurity are the
most common risks mentioned by startups
What are the three biggest risks of deploying AI?
% of non-AI startups

2x
more mentions of data
privacy, despite it not being
a deployment bottleneck

65%
fewer mentions of
organizational reputation
risks, implying they are
more open to experiments

Source: ALLVP State of AI Survey (2023), McKinsey. Note: Options with low mentions include physical safety, national security and political stability 34
“
The people who are crazy enough
to think they can change the
world are the ones who do.

”
Steve Jobs, Apple Co-Founder
Asteroid Continent:
AI in Latin America
Asteroid
Continent: All startups, everywhere, need AI.

AI in Latin I barely have had a chance to understand AI and LLMs. All I know is that
it’s about to change startups and startup building forever.
America Generative AI demonstrated to the average person not just the power
use case of everyday AI, but also the fundamental technology revolution
hidden behind closed doors, which emerged when we finally had the
capacity to compute and process billions of parameters.

Consequently, a technology that the mainstream only knew primarily for

increasingly accurate predictions began to extract information from
unstructured content and generate personalized output. While that is
certainly impressive, it begs the question - what can I do with it?

There are two significant outcomes that every startup should be

leveraging today; first, the optimization of their processes for increased
efficiency, and second, the empowerment of their value proposition to
Jimena Pardo
offer superior solutions for their users
Managing Partner, ALLVP
Luckily, we are on the first row and with something more than popcorn to
witness these changes.
37
All in AI Formidable
teams
Investment thesis
Solving Latin America’s
hardest problems

“
Future of Smart Human
Fintech
Commerce Cities Capital

Our new $150M fund

Leveraging AI technologies
will be dedicated to
fund Latin American AI
first and AI-enabled
startups solving the As we start deploying our fund IV, we’ve updated our investment thesis
hardest problems in to reflect our bet on AI. We cover the same sectors since 2012: Fintech,
Latin America. We Future of Commerce, Human Capital and Smart Cities. We continue to
seek to back miners be all in for formidable founders solving the hardest problems in Latin
looking for asteroids. America as described in the following investment framework.
38
Asteroid
Continent: For those who are not AI-native, the clock is ticking. It's time to leverage
AI in Latin their unique competitive advantages and enhance their value
propositions. We've observed that most of our technical founders have
America promptly decided to supercharge their existing services.

New edtechs, mental health chatbots, and enterprise SaaS startups

“
won't have these strengths, for example platforms, engaging UX, historic
data, or commercial contracts available to run their technologies.

Historically, we have more than a few precedents on how new

technologies can take some missteps, but none of them are so powerful
For those who are not
as the promise of what AI can become. Consequently, we must build
AI-native, the clock is
upon these revolutionary models responsibly, and understand the critical
ticking. It's time to risk involved in a holistic way.
leverage their unique
We, ALLVP, need to change or become irrelevant. Federico and I have
competitive advantages
decided to go all in AI. Our new $150M fund will be dedicated to fund
and enhance their value Latin American AI first and AI-enabled startups solving the hardest
propositions. problems in Latin America. We seek to back miners looking for asteroids.

39
 The Latin American healthcare system faces challenges due to an aging
population, more prone to chronic diseases, and a shortage of doctors.
• Population aged +65 will double by 2050 (17.5% of total vs. 8% today)
Case study • 30% of population lacks access to healthcare, with most countries
struggling with insufficient doctor to patient ratios

PROSPERiA
democratizes early PROSPERiA prevents blindness via a 4-step process
detection 1. AI-powered questionnaires to identify high-risk patients
2. Screening for visual defects using visual acuity testing and a fundus
of chronic diseases camera
through AI. 3. Images are analyzed by an AI that identifies damage linked to
chronic diseases
4. Cases with suspected ocular pathologies are referred to nearby
ophthalmology clinics

With this solution, PROSPERiA aims to increase the coverage and

address the shortage of ophthalmologists, by letting them focus on
treatment.
41
 Fintual provides proprietary mutual funds through an automated solution.
The penetration of robo-advisors in Latin America has significant potential
for growth, given the low financial literacy among consumers and the high
Case study costs associated with education and delivering personalized services.

Fintual launched Fintual is leveraging

a conversational generative AI to create

a WhatsApp assistant
model to simplify that answers doubts
investment users may have about
decisions. investments. This way,
Fintual will be able to
educate existing and
potential consumers
and offer a
personalized service.
42
 Yana provides emotional support to millions of Spanish speakers through
an AI-powered chatbot. Yana aims to make interactions more
Case study conversational, provide reliable, empathetic responses when needed, and
engage users to maintain high retention levels .

Yana fine tunes

Yana is launching a multi-class model that will identify messages that
LLMs through
need more human-like responses and lever ChatGPT to provide ‘free
proprietary flowing’ conversations.
data, enhancing
engagement with Yana is well-positioned to take advantage of foundational models because
human-like 1. With +2B messages and +12M unique accounts, Yana has data

responses. and domain knowledge no other competitor can match

2. Frequent interactions enable a continuous feedback loop

43
 Slang helps users learn English for specific business settings. Creating
content in an EdTech has historically been expensive because users need
tailored content with high quality and continuous updates to meet their
specific needs.
Case study Generative AI provided Slang with three capabilities that enable
personalization, reduce R&D and proofreading efforts
Slang leverages AI 1. Producing factually accurate content, even about complex topics
to scale its content 2. Producing linguistically correct content

creation process 3. Taking the perspective of specific persona in real-world situations

quickly and As a result, Slang has efficiently scaled its content creation process

efficiently. Paragraphs per 100 labor hours

Relative to 2022 average

44
03 Corporates.
Corporates: key highlights

Today, 54% of corporates consider AI a board-level priority, and 80%

expect it to be a priority in the future.

The main use cases for corporates are interacting with users (74%) and
optimizing sales and marketing (47%).

53% of corporates report hiring teams to oversee the use of AI, and 22%
report hiring teams of 6 or more people.

Corporations are most excited about the potential of AI to improve their

efficiency (74%) and enable personalized solutions (45%).
AI is a board-level priority for corporates, but deployment is
not matching; corporates expect to catch up in the future
Is AI a board-level priority in your company? Does it use AI in its day-to-day operations?
% of corporates, today versus expectations in the future

Source: ALLVP State of AI Survey (2023) 47

For corporates, the primary use case is interacting with users,
yet they are also exploring additional applications
Types of problems solved using AI # of problems solved using AI
% of corporates % of corporates

Source: ALLVP State of AI Survey (2023) 48

Among corporates, Machine Learning is the most adopted AI
technology, with Generative AI trailing close behind
Type of AI used
% of corporates

2.8x
higher adoption of
speech recognition
compared to startups

2.2x
higher adoption of
computer vision
compared to startups

Source: ALLVP State of AI Survey (2023) 49

58% of corporates have a C-level leading their AI strategy,
while 53% report hiring AI teams
Who leads the use of AI within your Are you hiring a team to oversee the use
organization? of AI in the organization?
% of corporates % of corporates

58%
C-level
leadership,
vs. 76% at
startups
Corporates ramping up hiring signals a push to
catch up with startups

Source: ALLVP State of AI Survey (2023) 50

Corporates expect significant more AI adoption, but still
below startups level
In what % of your company’s processes is AI embedded today? How will this change in the future?
% of corporates

39%
of corporates
expect most
processes will be
AI-embedded,
compared to 58%
for startups

Source: ALLVP State of AI Survey (2023) 51

Corporates are most excited about AI’s potential to improve
their efficiency and enable personalized offerings
What are you most excited about the impact of AI on your business?
% of corporates selecting an option as first or second

74% 45% 37%

Be more productive Offer more Make better decisions

and efficient personalized services

Source: ALLVP State of AI Survey (2023) 52

The biggest roadblocks for deploying AI in corporates are
issues with data management and lack of technical talent
What are the 3 biggest bottlenecks to deploying AI in your company?
% of corporates

2.3x
more mentions of data
privacy or management,
showing more caution

2.1x
more mentions of lack of
commitment, highlighting
culture and alignment
barriers

Source: ALLVP State of AI Survey (2023) 53

Data privacy, cybersecurity and regulatory compliance are the
most common risks mentioned by corporates
What are the three biggest risks of deploying AI?
% of corporates

1.5-2.2x
more mentions of data
privacy, regulatory
compliance and workforce
displacement

Source: ALLVP State of AI Survey (2023), McKinsey. Note: Options with low mentions include physical safety, national security and political stability 54
“
The only way to make sense out
of change is to plunge into it,
move with it, and join the dance.

”
Alan Watts, English author
Foundations to
implement an
AI strategy The advent of AI has created unprecedented opportunities for companies.
Robotic Process Automation and LLMs have either fully eliminated or
significantly reduced the need for humans to be involved in multiple tasks.
Machine Learning algorithms are converting proprietary data sets into a
competitive advantage everywhere from sales and marketing to supply
chain optimization. The question is no longer whether AI can help, it is
figuring out how to implement it.

With the current rate of change in AI, this challenge is further

compounded, making it more important than ever that companies focus
on the foundations of the AI stack, where implementation problems can
be most easily tackled.

The first area is data. Companies need to ensure that the data they
collect, structured or unstructured, is cleaned and made available
Julián López-Portillo wherever it is required. Furthermore, data management will be vital in
Co-founder & CEO, Senzai keeping PII and sensitive data secure, especially when integrating with
vendors or foundation models.
56
Foundations to
implement an
AI strategy
The second area is measurement. The impact of any AI implementation
should be clearly measured; this includes not only value metrics, but also

“
other operational and ESG metrics.

The third is experimentation. Companies need to learn to experiment to

ML algorithms are stay ahead. Creating an experimentation culture leads to more
converting proprietary entrepreneurial mindsets by pushing data-driven decisions. It also helps
avoid vendor lock-in, which frees up the company to continuously try new
data sets into a
technologies.
competitive advantage.
The question is no Latin American companies need to focus on these three neglected areas
longer whether AI can if they are going to be prepared to take full advantage of the upcoming AI
“tsunami”. If they do not, they either face the prospect of competitors
help, it is figuring out
surfing their way past them, or another wave of disappointment from
how to implement it. what AI can deliver.
57
Unlocking Creativity:
The Transformative There is no doubt that artificial intelligence (AI) has emerged as a
transformative force in various industries, and content creation is no
Power of AI in exception. The impact on the efficiency and speed of content creation

Content Creation processes is just a small glimpse of its enormous potential in different
fields. Regardless of the industry, AI tools can write about absolutely any
subject, from finance to health, science, and sports; its capabilities
encompass a world of possibilities.

With its ability to analyze vast amounts of data, generate insights, and
mimic human cognitive processes, AI has revolutionized the way content
is generated, curated, and distributed. Looking towards the future,
several studies predict that up to 90% of internet content will be
produced using artificial intelligence, including not only text but also
videos, images, and audio files.

However, while some view these types of tools with concern, we see
them with great enthusiasm. We believe we are witnessing a paradigm
shift that will have a significant impact on future generations. If we are to
Damian Fraser stay competitive, it is important to become familiar with these tools and
Partner, Miranda Partners engage in the conversation. As mundane tasks disappear, new jobs and
industries will be created.
58
Unlocking Creativity:
The Transformative
Power of AI in
Content Creation

“
In the case of content generation, we believe that AI will unlock human
creativity like never before, rather than replacing content creators, by
If we are to stay automating various aspects of the creative process, such as generating
competitive, it is ideas and creating initial drafts. This will allow content creators to explore
important to become new formats, including hyper-personalization, ultimately enhancing the
familiar with these tools user experience.
and engage in the It will also fundamentally change how the world perceives content, as it
conversation. As becomes a cheaper and more efficient tool to reach target audiences.
mundane tasks Now more than ever, it is essential to be open to new perspectives and
disappear, new jobs and opportunities, to learn and to become proficient in using these new tools,
industries will be which can put us one step ahead. Thanks to the rapid proliferation of
created. new AI-based tools, this is just the beginning of a new and exciting era.
59
 After working with corporates, across the globe, the Senzai
founders reached the same conclusion as this report…
so they decided to solve the problems.

01 Start with the data

Case study
Senzai built its own data platform. It’s platform agnostic; if you
can click a mouse you can operate it
Senzai: Learnings
from +100 02 Make it easy

cumulative years Senzai makes building a campaign as easy as writing in

ChatGPT. Just say what you want to achieve, and the platform
using AI to optimize creates the campaign
sales & marketing
03 Measure the value

Measuring is at the core of Senzai – it only charges a

percentage of incremental value so the proof is in the billing
60
 Coca-Cola FEMSA serves over two million corner stores in Latin America,
but its sales rep model faced challenges in sustaining growth. The

Case study company needed to expand its reach and streamline the order-taking
process, while maintaining a personal touch with store owners

Coca-Cola FEMSA
Coca-Cola FEMSA decided the best way to achieve their objective was
digitizes more +1M
through conversational commerce in Whatsapp. It partnered with Yalo to
stores in LatAm implement a solution that enabled
through
conversational
commerce. +1M 80% 7-9 minutes
digitized stores order conversion new average visit
growing quickly rate ordering time as reps are
through Whatsapp focused on strategic
advice

61
 Intercorp is one of Peru’s largest corporations, with over 99,000
employees working in 40 companies across retail, financial services,
Case study healthcare and education. It has over US$ 9 billion in revenues, equivalent
to 4% of Peru’s GDP.

Intercorp partners On June 16th, it announced a partnership with Wharton AI & Analytics for
with Wharton to Business, an academic research center at Upenn focused innovative uses
implement the latest of artificial intelligence and data analytics for corporate settings

advances in Artificial
As part of the process, five research teams will be involved in the projects
Intelligence. for a period between 9 and 12 months

“Partnering with Wharton AIAB amplifies our ability to anticipate and fulfill
customer needs, enhancing their experiences across all interactions”
Iván Herrero, Intercorp’s Chief Data Officer
62
 OpenAI partnered with Bain & Company, a global management consulting
firm, to bring AI solutions to corporates around the world. The partnership
aims to combine OpenAI’s tools and platforms with Bain’s strategic
expertise and implementation capabilities.
Case study
Two projects have already been announced.
OpenAI announced a
services alliance with
Bain & Company to
help enterprises “Create Real Magic” campaign Hopla: ChatGPT-powered
implement AI chatbot
Invited customers to submit Users request help through chat,
solutions. digital artwork through a and shopping cart is filled based
platform that combined GPT-4 on their budget, constraints or
and DALL-E capabilities menu ideas

63
04 Venture capital.
Venture capital: key highlights

50% of funds consider important that startups use AI.

26% of funds report having an AI expert in their team.

35% of funds are actively helping their portfolio companies deploy AI.

32% of funds are using AI to source investment opportunities, and 38%

to analyze them.

65
Private investment in AI startups has boomed both globally
and in Latin America
Capital invested in AI startups, globally Capital invested in AI startups, Latin America
US$ B US$ M

Source: Pitchbook, LAVCA 66

The surveyed sample is led by Mexican and South American
VCs actively investing in Latin America
Where is your VC fund based on?
% of VC funds

18%
United
States
38%
Mexico 12%
Other
94%
countries

32%
South
America is actively investing
in Latin American
startups

Source: ALLVP State of AI Survey (2023) 67

50% of VC funds consider important that startups use AI and
26% have AI experts in the team
How important is it for you that a startup is using AI? Do you have any AI experts in your team?
% of VC funds

Source: ALLVP State of AI Survey (2023) 68

Although 35% of VCs are actively helping their portfolio
deploy AI, there are opportunities to increase adoption
Are you actively helping your portfolio What percentage of your portfolio
companies deploy AI? companies is actively deploying AI?
% VC funds % VC funds

Source: ALLVP State of AI Survey (2023) 69

Funds are starting to explore AI’s potential in sourcing and
analyzing investment opportunities

Sourcing Analyzing

32% 38%
of VCs use AI of VCs use AI

Source: ALLVP State of AI Survey (2023) 70

“
If you're offered a seat on a
rocket ship, don't ask what seat!
Just get on.

”
Sheryl Sandberg, Meta COO
Evolving Paradigms:
The Role of AI in
Latin American
Venture Capital Latin American investors and operators are well positioned to ride the
new wave of AI momentum in what represents a mostly untapped
regional opportunity with global implications.

The region recorded USD 202m invested in 49 AI/ML companies in

2022, compared to USD 52m across 33 companies in 2021 – a
whopping 4X year-over-year increase. However, while there is clear
growing investor appetite, large-scale investments are still relatively
limited.

Semantix, a Brazilian data provider, raised USD 100m in 2022 – still the
biggest ticket since 2019. In Spanish-speaking Latin America, the
opportunity is equally significant and the market is still nascent. From
Carlos Ramos de la Vega 2019 to Q1 2023, the top 20 investments outside of Brazil amounted to
Director of VC, LAVCA USD75m, with only two companies raising double-digit figures: Zippedi, a
Chilean sales and inventory management platform, and Emi Labs, an
Argentine frontline recruitment automation startup.
72
Evolving Paradigms:
The Role of AI in Players in the region recognize that AI should not be treated as a new
standalone investment category, nor should it be conceived as the
Latin American business panacea. Investors are emphasizing the importance of building
Venture Capital enduring businesses around proprietary models or datasets that can
provide defensibility and a sustainable moat, without relying solely on
strategies based on application layers and cloud-sourced APIs.

“
At the same time, fund managers are aware of the renewed importance
of data privacy and IP protection among the decisive themes for the
The reach of innovation technology to become widely adopted within Latin America. Addressing
will also pose new both will be crucial to building long-lasting trust with end-consumers and
questions for investors as ensure the ethical use of any AI-enabled product, particularly with the
they recognize the impact increasing sophistication of generative AI.
of generative AI will likely The reach of innovation will also pose new questions for investors as
extend beyond their they recognize the impact of generative AI will likely extend beyond their
investment mandate and investment mandate and also challenge their financing structures
also challenge their themselves. The newest tools will enable founders to become much
financing structures more resource efficient, testing current approaches to investment
themselves. benchmarks, portfolio construction and return expectations.
73
 EQT Ventures is a multi-stage, sector-agnostic Swedish VC with over
€1.2B in AUM. In 2017, it developed an AI-driven tool to source
companies, Motherbrain, which has since evolved into a co-pilot across
the full investment lifecycle.
Case study
Motherbrain aims to enhance human expertise in each stage:
EQT Ventures created 1. Sourcing: monitor data signals, proxies for growth and proxies for
Motherbrain, a data- momentum to identify hidden gems early on

led investment 2. Analyzing: integrate fragmented data about a company or industry

assistant. from external and internal sources, leveraging the fund’s full
network
3. Value creation: helps with finding talent, M&A targets, benchmarks
and tracking competitors for portfolio companies

74
ALLVP Research Report
Appendix

76
Demographics | Startups

Source: ALLVP State of AI Survey (2023) 77

Demographics | Corporates

Source: ALLVP State of AI Survey (2023) 78

Demographics | Venture Capital

Source: ALLVP State of AI Survey (2023) 79