From OpenAI’s ChatGPT to Google creating its ChatGPT version (Bard), Artificial Intelligence is set to revolutionize everything in the modern world.
While this technology began in the 1950s with the Logic Theorist (the first problem-solving program that gave us hope), the last decade has seen AI take big leaps.
Such big leaps that, besides AI start-ups, corporate investors are even more optimistic about profiting from this technology.
But how much are corporate investors willing to risk in AI technology? And which companies get the lion’s share of these investments?
We wanted to answer these questions, so we analyzed over 10,000 AI companies and their funding data between 2015 and 2023. We collected this data from CrunchBase, NetBase Quid, S&P Capital IQ, and NFX.
Check out the charts below to see the AI investment trend in the past 7 years and which companies are getting the investment billions.
Corporate Artificial Intelligence (AI) investment has risen consistently to the tune of billions
Our analysis found that the global total corporate AI investment reached almost $94 billion in 2021. It’s a significant increase (about 34%) from the previous year, where investors put $67.85 billion into AI-focused companies.
If you compare the change from 2020 to 2021 with the previous 3 years, where AI investment remained almost consistent, you’ll agree with other researchers that the 2020 pandemic accelerated this growth.
Some researchers found that in 2020, private investors put $13.8 billion into AI drug discovery. And based on our findings, most of the corporate AI investment in the focus period was from private investment accounts.
Although there was a slight drop in 2018, there has been a recurring boost in investment volumes every year since then. And as consulting firms like McKinsey and Delloite continue to fuel the digital transformation craze and AI becomes more accessible, we expect more investors to fund AI-focused/Machine Learning Operations (MLOps) startups.
OpenAI leads the MLOps pack with over $11 billion amassed since its inception, while all the other companies received a combined funding of about $3 billion. However, all the top 10 most funded MLOps startups received over $100 million in funding.
OpenAI created Dall-E (AI that creates digital images) and ChatGPT. It’s a product of entrepreneurial minds and AI researchers; Elon Musk, Sam Altman, and Ilya Sutskever. While the company started as a non-profit in 2015, Altman changed it into a for-profit organization in 2018. OpenAI has attracted big-name investors like Microsoft, who’ve incorporated the lab’s technologies into its products.
The next most funded AI startup was Anthropic. It was founded by OpenAI’s ex-employees, who aimed to develop more human-like and safe AI. The company raised 1 billion dollars in funding within three rounds. Google is their most recent investor, with $300 million in funding.
Scale AI is a data annotation platform providing high-quality data to train AI models. Founded in 2016, the company has raised $602.6 million, with the most recent investment round amassing $117 million to support 15 AI projects.
Anyscale is a computing platform that simplifies the development, deployment, and management of Ray applications at scale. Deployed in 2019, the California-based company has secured a total funding of $259 million, with the most recent in August 2023, where they got a $99 million investment.
Inflection AI enables developers to train AI models without sharing that data with anyone. The company was co-founded by LinkedIn’s co-founder Reid Hoffman and two others in 2022. In its first year, the startup raised an impressive $225 million in one round.
Weights & Biases created a developer-first Machine Language Operations platform that offers performance visualization tools for machine learning. The company has raised $200 million since its inception in 2018 and is valued at $1 billion.
Cohere AI provides affordable and easy-to-deploy large language models that allow computers to read, write and understand human requests better. The 2019 company raised $164.9 million from institutional venture capital firms like Index Adventures.
Hugging Face develops open-source tools that use machine learning to build applications, like the Transformers library that developers use to create natural language processing applications. The company was founded in 2016 and has raised $160.2 million in over five funding rounds. It is currently valued at $2 billion.
OctoML allows developers to deploy machine learning models on any hardware without needing specialized skills. Since the company’s inception in 2019, it has raised $131.9 million in over four rounds. Four investors fund OctoML including Madrona Venture Group and Addition.
AI21 Labs created the AI21 Studio, which has language models that rival OpenAI and other natural language processing platforms. As of 2023, AI21 Labs has secured $118.5 million in over six rounds, the latest being $64 million from a Series B round that valued A121 at $664 million.
What’s ahead for Artificial Intelligence (AI) investment?
While we can’t predict how robust or accurate AI systems will get in the next few years, one thing is certain; the AI race just began.
Our findings reveal that AI-focused startups have the potential to raise billions in funding, demonstrating the corporate investors’ confidence in Artificial Intelligence.
Time will tell who will dominate the space, but OpenAI with the launching of ChatGPT seems to be doing everything fine.