Nearly Half Of All ‘AI Startups’ Are Cashing In On Hype
It can seem that hardly a day goes by that a new technology startup hasn’t raised investor cash on the hope that it uses artificial intelligence, or AI, as a key part of its business. Now however, a new report makes the surprising claim that 40% of European firms that are classified as an “AI startup” don’t exploit the field of study in any material way for their business.
Out of 2,830 startups in Europe that were classified as being AI companies, only 1,580 accurately fit that description, according to the eye-opening stat on page 99 of a new report from MMC, a London-based venture capital firm. In many cases the label, which refers to computer systems that can perform tasks normally requiring human intelligence, was simply wrong.
“We looked at every company, their materials, their product, the website and product documents,” says David Kelnar, head of research for MMC, which has £300 million ($400 million) under management and a portfolio of 34 companies. “In 40% of cases we could find no mention of evidence of AI.” In such cases, he added, “companies that people assume and think are AI companies are probably not.”
Startups labelled as being in AI attract 15% to 50% more funding than other technology firms.