Neural Notes: Ex-Microsoft execs secure $5.1 million to blend AI with AR hardware

Welcome back to Neural Notes, a weekly column where I look at the most interesting (and sometimes weird) Australian AI news of the week. In this edition: SpatialGPT, the Aussie AI startup made up of Microsoft alumni that’s focused on hardware. Oh and it just raised over $5 million.

Earlier this week InnovateGPT — a venture studio that focuses on AI — announced a $5.1 million seed investment in SpatialGPT, a new generative AI startup founded by former Microsoft executives.

The funding round, which includes participation from several high-profile angel investors, marries the worlds of hardware and software in the AI space.

Going the venture studio route

SpatialGPT is spearheaded by ex-Microsoft executives George Stavrakakis and Rupert Walsh. Robert Marolda has been appointed CEO of SpatialGPT and spent nine years at the tech giant.

The collective half a century of experience in the space is of particular note because of the role venture studios play in its startups.

Unlike traditional VCs, venture studio startups are born from within and you often see executives from the studios themselves end up in key roles in the businesses that come out of them.

“I just wanted it to be really raw and gritty. I wanted to apply all of my learnings and experience — and the broader team’s because we’re all corporate refugees — to just help people accelerate both their idea and their go to market,” Stavrakakis said to SmartCompany.

“I just want to build an environment where it’s really hands-on where we can apply all of the MBA that we paid for and pass it over to our startups.

It’s quicker, faster, more dynamic. You’ve got to pivot daily, if not hourly at that part of the cycle.”

SpatialGPT is going after hardware and software in the AI space

Much like the venture studio it was molded in, SpatialGPT is AI-focused and its goal is to utilise augmented and virtual reality devices such as the Apple Vision Pro and Microsoft HoloLens to transform spatial environments in industries such as architecture, construction, education, healthcare, and retail. With generative AI of course.

It’s also working with Microsoft’s Azure OpenAI Service as well as Australia’s own JigSpace — an AR startup that starred in the Apple Vision Pro announcement in 2023.

Combining VR/AR tech and AI, SpatialGPT says its solutions are designed to enhance operational efficiency, reduce delays and optimise costs. They include virtual walkthroughs for early design decisions, real-time progress tracking with automated reporting and advanced data collection for risk mitigation and insurance claims.

While there are plans to push into multiple sectors, it is starting with billion-dollar projects connected to construction.

“Our decision to focus first on the construction sector stems from recognising its pivotal role in the economy and the substantial potential for positive change within this key area,” said George Stavrakakis, CEO at InnovateGPT to SmartCompany.

“It’s clear that this sector not only plays a crucial role in our economy but also presents a ripe landscape for innovative advancements.”

The construction industry, which accounts for about 10% of Australia’s GDP, has faced significant productivity and efficiency challenges, with a 1.5% annual decline over the past two decades. SpatialGPT aims to address these issues.

“One of the amazing opportunities we have is marrying the hardware with a really intelligent brain called artificial intelligence and generative AI in particular. When you fuse those two technologies together, you can be in environments where you’ve got either a personal coach helping you do an exercise onboarding, training, you know, in construction,” Stavrakakis said.

Stavrakakis also shared his thoughts on the potential of Apple’s AR/VR technology — that its strongest use case is in enterprise applications over consumer use.

And that’s probably a fair point. For most consumers, the Apple Vision Pro is prohibitively expensive at US$3499.

Here in Australia, you can get them through third-party sellers for well over $6,000.

The price tag is so eye-watering that there was an audible gasp from the audience when Apple announced it live last year.

“The Apple Vision Pro is absolutely best in class. Great device, great experience. Apple makes a great kit, and this is just version one,” Stavrakakis said.

“The magic will be in the software being integrated into that experience and in coming up with use cases that I call productivity-based. Do I really want to get into an Apple Pro lens and watch a Netflix film, no.

For Stavrakakis, he looks at these types of hardware and sees how it could be applied to a 3D model or space and how problems could be addressed visually or through an LLM and AI.

“The Apple Vision Pro, while an excellent device, is just the beginning. The real magic happens when you integrate powerful AI with advanced AR hardware, creating use cases that are genuinely productivity-based. This is where we see the potential to transform industries,” Stavrakakis said.

“Our vision isn’t that you’re going to buy an apartment and need an Apple Vision Pro. It’s an enterprise application and service. You may interact with that service when you’re engaging with a construction company or at the design level — or whatever the functional level is — I don’t see people walking around with Apple Vision Pro or Holo Lenses all over the place.”

Diverse ecosystems and talent inclusion

SpatialGPT is also committed to fostering a diverse and inclusive ecosystem. According to Stavrakakis, his team are actively working to amplify women in the tech industry.

“We are being really prescriptive in trying to encourage female talent into the ecosystem here, just to break down those barriers of both perception and access,” said Stavrakakis.

Stavrakakis didn’t mince words about the challenges faced by startups, especially those led by women.

“It’s bullshit in my mind… there’s a lot of good intent, but that doesn’t necessarily translate into investment, where it needs to be,” Stavrakakis said.

He went on to highlight the realities of securing funding and the importance of creating more access points for diverse talent.

“When you have worked in the industry you can leverage the network and get people to rally around that,” Stavrakakis said.

“We want to make sure that we’re amplifying. I call it access — you’ve got to give people the opportunity and access, where you can sort of show them the art of the possible.”

Looking ahead

SpatialGPT is already engaging in global projects that the team is not quite ready to talk about yet. Sorry, I tried!

However, Stavrakakis did say the company is not only committed to leveraging AI and AR technologies but also to continuously refining its offerings to meet the evolving needs of its target industries.

“The speed and change in the AI world is running. I was reading an article only last week that the processing power in the AI models is doubling every couple of months,” Stavrakakis said.

“We’ve just got to make sure that we’re marrying up the capability to what the market can consume.”

SpatialGPT is also actively seeking partnerships with educational institutions and healthcare providers to pilot new initiatives.

Reflecting on the core mission and approach of SpatialGPT, Stavrakakis emphasised the importance of problem-solving over technology for its own sake

As Stavrakakis put it, “It’s not about the tech. It’s about the problem you’re trying to solve, and if there’s a problem we can solve, awesome. If there’s not, then that’s okay too.”

Other AI news this week:

• Speaking of Microsoft, it announced its own push into AI hardware this week with Microsoft CoPilot +PCs
• Canva added to its suite of AI tools and also revamped its UI to target businesses
• OpenAI has paused work on its Scarlett Johansson AI voice imitation after the actress dunked on them publicly
• Staying on OpenAI, it also hasn’t had a great time handling the team in charge of governing ‘superintelligent’ AI
• Humane (yeah the ones with the AI pin) is looking for a buyer after its half-baked product launch
• Meta has a new AI council… and it is full of white dudes
• TikTok has switched on AI for its ads.

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