Chinese AI startups overtake US peers for VC investments
Written by NTN staff
Chinese AI start-ups raised $5 billion in VC funding in 2017 and overtook their US counterparts, says ABI research.
Contrary to their US counterparts who raised US$4.4 billion of investment from 155 investments, Chinese startups raised US$4.9 billion from merely 19 investments, indicating a sharp focus by the investors on mature AI applications with strong commercial viability and successful use cases. In addition, the influence of the Chinese government plays a key role in attracting investment in AI startups.
The overall investment values for AI start-ups increased year-on-year by 150% globally to reach $10.7bn in 2017.
“The bullish sentiment shared among Chinese investors is a clear sign that China is going all-in in artificial intelligence (AI). The government of China is setting clear policy guidelines for the future development of AI and startups are responding with cutting edge AI technologies across many industries,” said Lian Jye Su, a Principal Analyst at ABI Research.
Among all the Chinese startups, Bytedance walks away with the highest funding. The creator of Toutiao, a personalized news aggregation app, and Douyin, a personalized video clip app, has raised over $3 billion in investment and is enormously popular among Chinese youth, due to its content personalisation and curation algorithms. Another sector that received a lot of attention was facial recognition. SenseTime and Face++ managed to raise significant funding due to the adoption of facial recognition technologies by various public agencies, payment and e-commerce companies.
They are also deeply involved with AI chipset innovation. Cambricon Technologies and Horizon Robotics have raised $100 million in Series A funding respectively to design and manufacture purpose-built AI chipset for machine vision. The aim to launch a ‘Made in China’ chipset is one of the key priorities of the Chinese government.
In contrast, Europe seems to have long-term strategic objectives as far as AI investments are concerned. Startups in the region have diversified interests across different industries and verticals, mainly for use cases such as cybersecurity, digital ID, public safety, healthcare, and IoT.
Could Europe get left behind in AI development? That's the worry of some observers in the region as AI is linked increasingly to a geopolitical agenda.