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Investors are growing increasingly wary of AI | TechCrunch

Apr 15, 2024 - techcrunch.com
Global investment in AI fell for the second consecutive year in 2023, with both private and corporate investments declining, according to a report from Stanford’s Institute for Human-Centered Artificial Intelligence. The report cites data from Quid, showing that AI-related mergers and acquisitions fell by 31.2% from $117.16 million in 2022 to $80.61 million in 2023, while private investment dipped from $103.4 million to $95.99 million. Despite this, more AI companies received investments than ever before, with 1,812 AI startups announcing funding in 2023, a 40.6% increase from 2022.

Analysts attribute the overall decline in AI investment to slower-than-expected growth and the challenges of scaling AI technologies in real-world applications. However, generative AI, which creates new content, remains a bright spot, with funding reaching $25.2 billion in 2023, nearly nine times the investment in 2022. Despite the general downturn in AI investment, experts believe the AI industry is moving towards a more sustainable and normalized pace in 2024, with the overall trajectory for AI investment remaining robust and poised for sustained growth.

Key takeaways:

  • Global investment in AI fell for the second consecutive year in 2023, with both private and corporate investments in the industry experiencing a decline.
  • Despite the overall decline, more AI companies are receiving investments than ever before, with 1,812 AI startups announcing funding in 2023, a 40.6% increase from 2022.
  • Investors are becoming more discerning, with a shift towards a more mature and deliberate approach in evaluating AI investments due to challenges in scaling AI technologies in real-world applications.
  • Generative AI, which creates new content, remains a bright spot in the industry, with funding reaching $25.2 billion in 2023, nearly ninefold the investment in 2022.
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