Venture capital (VC) funding in artificial intelligence (AI) startups hit a record high last year with the top 10 VC investors participating in a total of 150 funding rounds, which is an increase of 66.7% compared to previous years. Furthermore, eight of the global top 10 VC investors in the AI tech space were headquartered in the US, according to GlobalData, a leading data and analytics company.
Likewise, the total proportionate investments by the top 10 VC investors also increased by 120.9% compared to previous years average. VC investors seems to be optimistic about the future of AI space and related services.
The US and China collectively accounted for more than 60% of the total VC investment volume and around 80% of the total investment value in 2018. IDG Capital and Baidu Ventures were the only two non-US companies to feature in the top 10 list.
All the top 10 global VC investors (Sequoia Capital, Intel Capital, Lightspeed Venture Partners, Accel, IDG Capital, Y Combinator, Baidu Ventures, Battery Ventures, First Round Capital and New Enterprise Associates) registered an increase in the investment value in 2018 compared to the 2014–2017 average.
California-based Sequoia Capital registered the highest number of investments and proportionate investment value in 2018. Chinese Internet giant Baidu’s investment unit, Baidu Ventures, registered the highest growth in the number of investments as well as proportionate investment value in 2018 over the 2014–2017 average.
Aurojyoti Bose, Financial Deals Analyst at GlobalData, says: “On the back of decades of Federal research funding, best-in-class talent pool and corporate initiatives, the US remains at the forefront of the VC investment AI space. However, it lacked any Federal level national policy agenda on AI until February 2019, when President Trump launched the American AI Initiative program. On the other hand, several countries including China were ahead in releasing their AI development roadmaps and committed billions of dollars towards it.”
Though the US topped in terms of the number of VC investments, the country’s share of investment volume decreased from 55.7% during 2014–2017 to 44.3% in 2018. On the other hand, AI start-ups in China registered an increase in the share of investment volume from 4.6% during 2014–2017 to 17.9% in 2018.
Similarly, American AI start-ups’ share of total investment value decreased from 64.1% during 2014–2017 to 46.3% in 2018 while AI start-ups in China registered an increase in the share of investment value from 14% during 2014-2017 to 31.9% in 2018.
China is working on its goal of becoming a global AI leader by 2030. According to the 2018 China Artificial Intelligence Development Report, the country has the highest number of AI patents and also ranks second in terms of AI companies count.
Bose concludes: “With the launch of American AI Initiative, the competition between the US and China is likely to become fiercer. As a result, the global AI space is expected to witness a growth in the number of start-ups, which in turn will result in strong VC investment activity.”
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.