Over the past five years, Artificial Intelligence (AI) Startups have come to the fore, with many new startups making the headlines daily. This trend is in line with the heightened interest that AI has evinced from various stakeholders, including industry, academia and policymakers.
The AI and ML spending is forecasted to reach US$57 Billion by 2027, as per estimates from IDC, at a CAGR of 48%. Similarly, a recent study on High Tech Patenting from the Stanford Institute for Economic Policy Research threw up some interesting insights on the exponential growth in AI and ML patents since 2010, with Microsoft garnering a lion's share of those patents between 2010 and 2015. Today, Microsoft leads the ML race with >2000 patents. Enterprises such as Microsoft and Google are also keenly interested and invested in AI startups.
It is in this background that we, at Hammerkopf, wanted to get answers for some of the following questions to paint a broad picture of the Artificial Intelligence Startups, specifically in Asia.
1. What does it mean to be an AI Startup in 2018?
2. What are the focus research areas for AI Startups: Applied versus Core?
3. How do Asian AI startups envision AI?
4. Typically, what are the challenges that Asian AI startups face?
5. What are the key VC concerns with funding AI startups?
These, and several other questions, formed the basis of the "State of AI" Survey 2018, conducted by Hammerkopf with 22 leading technology startups focused on Artificial Intelligence (AI) research in Asia. The survey spanned across two months, and spread across AI startups from diverse Asian geographies, including India, China, Singapore, Malaysia, Japan, Israel among others.
The objective of the "State of the AI" Survey was to build a robust picture of the AI landscape in Asia, and the challenges that AI startups face, in finding product-market fit, in addressing VC concerns, in finding right talent among others. Towards this end, primary interviews with key stakeholders, followed by a comprehensive survey gave clear insights on the ecosystem.
Here are some of the key insights from the State of AI Report:
Access to Talent and the right skill-sets are the most critical challenge facing AI startups. This is a good indicator for the need to develop the AI ecosystem, including skills ecosystem, starting from the college level. Academia has a clear role to play in developing the workforce for tomorrow in AI.
Similarly, the other critical challenge is that of the lack of industry metrics to guide themselves. Most Asian AI startups surveyed by us are undeniably pioneers in their chosen technology domain, and they found their own way to accomplishing product-market fit. Lack of metrics is a challenge, but its entirely upto entrepreneurs on how they face up to the challenge.
Alongside lack of metrics, is the third biggest challenge - one that pertains to maturity. Nascent AI startup entrepreneurs have to work with their instinct in finding their way to get the right research pathway, and go-to-market for their AI startup.
For Asian AI startups, the investor concerns are varied, ranging from lack of clear market opportunity, to lack of established market. Given the noise around AI, its no wonder that 27% of those surveyed indicated too much competition from similar AI startups vying for the same capital.
The complete State of AI Report 2018 is available for download here.