Investing in AI

27th March 2017

AI is rapidly transforming from a ‘nice to have’ to a ‘must have’ technological asset for businesses of all sizes across all sectors. Indeed the level of acquisitions of AI companies by the likes of Alphabet (Google), IBM and other tech giants reflect this increasing hot and dynamic investment focus. A shortage of AI talent in the US, Europe and Asia has created huge valuations of companies with ten or less employees, with final figures often representing values of $5.7million per employee. These valuations are in part fuelled by huge interest by Chinese investors from both the corporate and individual spectrum. A trend of ‘acquihiring’ has emerged, where companies look to acquire AI start ups at early stages, not for the technology, but to realise the ultimate aim of bring AI talent in-house.

In keeping with this trend, CBBF attended an ‘Investing in AI’ Forum held at Taylor Wessing LLP in London on Monday 27 th March. Panellists included AI entrepreneurs, fund managers and venture capitalists who shared their industry insider knowledge of the trends of this fledgling sector. One prediction that they all share in common is the belief that the expansion in AI valuations and investment is not a bubble, but rather is fuelled by a structural change in how the global economy will come to produce and innovate. When asked where along the timeline the industry now rests, all the panellists concluded that it was impossible to tell. However, they also reasoned that all the indicators show that as high valuations fuel investment and influx of new talent, innovation will continue to produce new products, applications and market growth.

Indeed, evidence of this is already can be seen outside the AI sector by the industries that serve as destinations for the technology’s application. For instance, Accenture has recently predicted that AI will become the main medium by which banks will interact with customers within the next 3 years. The huge impact of AI on customer service, transport, healthcare and other sectors will bring huge efficiency gains and other advantages, however the challenges are also worthy of substantial consideration. It was proposed by Siavash Mahdavi, one of the forum’s panellists, that there is not a single sector globally that does not currently have a start-up looking to disrupt the industry through either AI development or application. It has been described as a revolution, and one that will have both winners and losers.

CBBF is very active in the AI/AR/VR space and will shortly be releasing a market research report to our clients connecting technology developments in the West with the investment appetites and trends of the East for the benefit of our clients and wider audience. CBBF welcomes those interested to connect to CBBF via WeChat to stay updated with the developments of this highly dynamic industry.

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