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AI chip startups are in for a tough year, according to the latest market analysis from Omdia. According to Omdia’s Top AI Hardware Startups Market Radar, more than 100 venture capitalists have invested over $6 billion into the top 25 AI chip startups since 2018. This promising start has been overshadowed by the global chip shortage, which is having a major impact on inventory across the industry.

The shortage of chips is a global issue, with automakers, consumer electronics manufacturers, and AI startups all feeling the pinch. AI chip startups are particularly vulnerable due to the high cost and complexity of developing their own processor technology. This leaves them reliant on external suppliers, and with the global chip shortage in full effect, many have been unable to get the components they need. This has resulted in significant delays and production disruption.

Furthermore, many AI chip startups are still in the early stages, with few having achieved a profitable or sustainable business model. The shortage of chips is only making matters worse, raising the cost of doing business and creating further delays in product launches.

Overall, the outlook for AI chip startups is uncertain. While some are still managing to innovate and push their technology forward, the global chip shortage is making it increasingly difficult for them to operate. To weather this storm, AI chip startups need to be creative, taking advantage of new sources of capital and focusing on cost reduction wherever possible. In the end, those that are able to remain competitive and adapt to the changing market conditions will survive.