Corporate VCs ride AI startup wave

Artificial intelligence (AI) is no longer just science fiction; it's transforming industries and changing the way businesses operate. As a result, corporate venture capitalists (CVCs) are increasingly investing in AI startups to stay ahead of the curve.

Investing in AI startups boosts innovation and profits

CVCs are venture capital arms of corporations that invest in startups and emerging technologies. By investing in AI startups, CVCs not only gain access to cutting-edge technologies but also help innovative startups expand their reach and success.

According to data from venture capital database PitchBook, AI startups have raised more than $33 billion in venture capital funding since 2014. Corporate venture capital has accounted for a significant portion of that funding. In 2020 alone, CVCs invested $17.6 billion in AI startups, up from $9.3 billion in 2019.

Some of the largest AI startup investments by corporate venture capitalists include:

BMW i Ventures' $38 million investment in deep learning startup Nauto
Ford's $1 billion investment in autonomous vehicle startup Argo AI
Intel Capital's $240 million investment in AI chip maker Habana Labs
Google's Gradient Ventures' $10 million investment in data science platform Hugging Face
Microsoft Ventures' investment in natural language processing startup Semantic Machines

Why CVCs are increasing investments in AI startups

The rise of AI startups is driven by the increasing demand for AI-powered products and services across industries. Companies are looking for ways to automate and streamline processes, create personalized experiences for customers, and gain insights from data.

CVCs understand that investing in AI startups not only helps corporations adopt innovative technologies but also provides access to new markets. By partnering with or investing in AI startups, corporations can gain competitive advantages by leveraging technology to create new business models, products, and services.

The benefits of collaboration between AI startups and corporations

The benefits of collaboration between AI startups and corporations are numerous. Startups benefit from the resources and expertise of established corporations, while corporations gain access to cutting-edge technology and innovative ideas.

For example, Ford's investment in Argo AI not only accelerated the development of autonomous vehicle technology but also helped Ford gain a competitive advantage in the market. Similarly, Intel's investment in Habana Labs helped Habana Labs refine its AI chip technology and unlock new markets.

The future of CVC investments in AI startups

The future of CVC investments in AI startups remains bright. As AI technologies continue to evolve and transform industries, corporations will continue to seek out innovative startups to partner with or invest in.

CVCs will likely invest in AI startups that focus on building niche AI capabilities or applications that meet specific business needs, such as optimizing production processes or creating personalized customer experiences.

In summary, CVC investments in AI startups offer the following benefits:

Access to cutting-edge technologies and innovative ideas
New market opportunities and competitive advantages
Accelerated development of AI-powered products and services

References:

https://www.forbes.com/sites/tomtaulli/2021/01/16/the-incredible-growth-of-ai-startups-a-focus-on-corporate-venture-capital/?sh=4a6122681cd3
https://www.businesswire.com/news/home/20210401005698/en/Global-Corporate-Venture-Capital-Investments-in-Artificial-Intelligence-Startups-in-2020-Cumulated-to-17.6-Billion-A-176-Year-on-Year-Increase-ResearchAndMarkets.com
https://www.crunchbase.com/hub/artificial-intelligence-startups#section-re-funded

Hashtags:

#corporateventurecapital
#artificialintelligence
#AIstartups
#innovation
#techinvesting

Category:

Technology/Investing