Investment in the field of Artificial Intelligence is a key driver in the field of Artificial Intelligence Research and Development. In recent years, there has been a huge uprise in the adoption of Artificial Intelligence across various industries which is fuelled by practical use cases of AI. The adoption of AI has also been the reason for more investments pouring into the field. According to the Artificial Intelligence Index Report 2022 by Stanford Institute for Human Centred Artificial Intelligence(HAI), the amount of private investment in the field of Artificial Intelligence has more than doubled in the year 2021 as compared to 2020.
The important investment trends in the field of Artificial Intelligence according to the report are-
Private Investment makes a majority of the total Corporate Investment
The total corporate investment in the field of Artificial Intelligence for the year 2021 was 176.47 Billion USD. Private Investments made up for a majority of the total corporate investments in the year 2021 and accounted for a total of 93.54 Billion USD. This has been more than a two fold increase in investments by Private Investors as compared to 46 Billion USD in 2020. This also makes it the largest ever year on year increase in private investments in the field since 2014.
Another 72 Billion USD in Investment came from Mergers and Acquisitions which makes it second only to Private Investments. Other sources of investments were Public Offering which accounted for a total of 9.5 Billion USD in investment followed by Minority stake which accounted for a mere 1.3 Billion USD in investments.
Private Investments Soared, AI Startups decreased
While Private Investments in the field of Artificial Intelligence hava soared, the concentration of investment has also increased. This is evident from both, the decrease in the number of newly funded AI startups, and the increase in the total investment and bigger funding rounds.
2021 marks the third year for continuous decline in the number of newly funded AI startups which has decreased to a total of 746. While the number of newly funded AI startups has decreased, the funding rounds are getting bigger. The number of funding rounds that raised between 100 Million USD to 500 Million USD increased two-folds in the year 2021, going from 93 to 245. A similar trend was also observed in companies that raised between 50 Million USD to 100 Million USD. Meanwhile, funding rounds over 1 Billion USD also increased from 3 to 5.
US is the largest Investment Destination for AI making up for a majority of the Investment, China comes in a distant Second place
Private Investments totaled at 93.5 Billion USD for the year 2021, but where did that investment go?
It turns out that a majority of the private investment in the field of Artificial Intelligence went into the United States with the total investment being almost 53 Billion USD. China came in at a distant second with only a little over 17 Billion USD in Private Investments. This was followed by the United Kingdom with 4.65 Billion USD, Israel with 2.41 Billion USD, Germany with 1.98 Billion USD, Canada with 1.87 Billion USD, France with 1.55 Billion USD, and India, Australia, and South Korea each with a little over 1 Billion USD.
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