Artificial intelligence (AI) is becoming ever more integrated into our lives and the economy. It’s no surprise, therefore, that it’s also getting some serious funding. A moneytransfers.com analysis of the sector places private investment in AI in 2021 at $93.5 billion.—more than double what it was in 2020.
Venture Capitalists are targeting fewer but lucrative deals
The total amount of funding raised by venture capitalists (VCs) for AI startups has increased significantly since 2017. However, the number of companies qualifying for funding is shrinking.
What does the future of AI funding hold?
The AI sector’s value will exceed the $135B mark in 2022, growing at a CAGR of 38% between now and 2030 according to analysts. This increase can be attributed to improved performance by algorithms, increased use cases for AI products and services, and an influx of startups into the market.
U.S and China are dictating the pace of AI developments
The U.S and China lead in private investments in the field. The two are locked in a two-horse race for market dominance. Though the former currently holds an upper hand, the latter has been rapidly gaining ground following significant investments in that space.
By the end of 2020, the U.S had invested over $23B in private investments in the sector. That was more than twice the $9.9B that China did. But the country’s tech ambitions are keeping it on course to dethrone the U.S from its patch. The country has set its sights on becoming the world’s A.I innovation hub targeting to grow its market share to $150B.