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US Dethrones China, Reclaims Top Position in Global AI Investment

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A year after being pushed to the second position in global Artificial Intelligence (AI) venture capital investments, the USA has made a comeback in 2018, reveals a study by ABI Research.

ABI Research, an International Tech Market Advisory organization, identified that the US-controlled most AI investment values in 2018 at 52.3%. If the investment figures in 2019 are to be taken as a sign, the gap between the United States and China will widen further with the US gaining a clear edge. The US investment values will reach 70%.

China had secured first place in 2017 in terms of Global AI investments. This time the US attracted $9.7 billion and this was around 120% year-on-year increase. The outlay by those like Cruise Automation, Dataminr, Zoox, and Zymergen could further increase the investments to US$14 billion in 2019.

“The United States is reaping the rewards from its diversified AI investment strategy. Top AI startups in the United States come from various sectors, including Self-driving cars, Industrial Manufacturing, Robotics Process Automation, Data Analytics, and Cybersecurity. All these startups research on and invest in cutting edge deep learning technologies in their solutions, democratizing AI for enterprises and end consumers,” said Lian Jye Su, Principal Analyst at ABI Research.

China Maintained a Healthy Growth Rate

China continued to maintain a strong growth rate of 54% year-on-year, which was worth around US$7.4 billion. Past few years saw some strong AI startups from the country that includes SenseTime, Yitu Technology, and CloudWalk. However, the Asian superpower’s focus on certain strategic areas seems to have backfired. Chinese startups have been finding it difficult to expand into the overseas market due to the various regulations.

Slow Adaption a Hindrance to Asian Superpower 

Slow adaptation of AI in some sectors is a more potent and long-term threat to China than the ongoing trade war with the US. Due to affordable labor in sectors like industrial manufacturing, China is comparatively slow in implementing AI. Major enterprises still believe in the conventional workflow. Hence Digital Transformation is less aggressive and start-ups do not take risks. Still, in the long run, China can play a crucial role in popularizing AI.

“There is no doubt that Chinese AI investment is feeling the pinch of reality, but China is still undeniably the largest single market for AI implementation. Favorable policies and flexible regulations in China, backed by a government willing to invest and deploy innovative technologies at scale, will certainly amplify AI adoption in the region. While the United States may be leading in investment in AI research and development, in the longer term, China will be able to capitalize on those technologies and bring them to the masses,” Su concluded.

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