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Tech companies buying AI startups to expand their presence in the field

Tech Titans Bought 34 AI Startups In Early 2017

Google, Apple, Facebook are interested in startups with a narrow focus on niche AI-driven services
posted onMay 29, 2017

Major tech companies went on a buying spree in the first quarter of 2017, acquiring 34 artificial intelligence startups. Research firm CB Insights says, tech giants are looking to strengthen their AI game and aiming to catch up with other aggressive players in the field. The list of buyers includes Google, Apple, Facebook and other companies.

Google has overall bought 11 AI startups in the last five years, and has been the most active purchaser. Apple, Facebook, and Intel are all behind, according to CB Insights, without commenting on their strategies. An Apple spokesman, though, did confirm the recent purchase of the Lattice Data startup, which focuses on unstructured data.

Major tech players were twice as active in the first three months of this year, compared to the same period of time in 2016. Ford Motor Company invested a whopping $1 billion in Argo AI, founded by former members of self-driving departments at Google and Uber. The investment is one of the biggest deals so far.

The startups that have piqued tech giants’ interests, focus on more specific spheres of artificial intelligence, rather than try to compete with existing companies. They are interested in fields like health and retail, industry analysts say.

‘Major companies are going to create platform services. Startups, in turn, will focus more on applied intelligent apps’, said managing director of Madrona Venture Group, Matt McIlwain. Forward is one of those niche startups, aiming to use the AI technology to enhance healthcare.

‘Those who want to work on key AI problems, are more likely to work for bigger companies, it makes sense,’ said Adrian Aoun, a former Google specialist and now chief executive officer at Forward. ‘But for people who are eager to prove a new field, it makes more sense to work separately’.

Major companies, however, seem to be really interested in those smaller AI startups, that work independently, like Clarifai. It focuses on video and image recognition. Clarifai chief executive Matthew Zeiler says potential buyers have repeatedly expressed intentions to purchase the startup. They have approached Mr. Zeiler at least a dozen times since the startup emerged in 2013.

Businesses like transnational consumer goods company Unilever and multinational hotel search company Trivago have discussed the possibility of purchasing Clarifai. They and other firms are interested in the startup’s focus on a niche Artificial Intelligence field.

These and many other large companies are waging a war for academics that research artificial intelligence, trying to beat each other’s offers. Startups are usually small and don’t have the money to compete. However, they often promote their narrow focus on crucial problems to win over new specialists. Alive Cor is another example here. It is working on creating a portable heart monitor, which will be driven by Artificial Intelligence.

‘People who come here say ‘I want to work with you on a project that may potentially save my mother’s life’, said Vic Gundotra, the chief executive at AliveCor.

‘Google literally competes with almost every company on the planet’, said Zeiler. ‘Do you thing they will be your best partner for AI?’.

Source: Reuters