Many European AI Start-Ups Do Not Use AI
According to a recent report, 40% of Europe’s AI start-ups don’t use any AI programs in their products, highlighting the hype around the technology.
The research done by MMC Ventures, a London-based investment firm, could not find any evidence, based on public information and interviews with executives, of AI application at a shocking 40% of 2,830 AI start-ups in Europe. Nevertheless, these same companies are often described as AI-focused, said David Kelnar, MMC Ventures’ head of research, who further added that numerous start-ups had plans to develop machine-learning programs, an application of AI that sees computers automatically learn and improve from experience, in the future.
For example, the London-based start-up Skyscape analyses rooftops to find unused space for drone landings, urban farms and other projects, doesn’t currently utilise machine learning or AI, but is classified as an AI start-up.
Companies branded with AI have historically raised larger funding rounds and attracted higher valuations than other software businesses. The research displayed that the median funding round for an AI start-up last year was about 15% higher than for a software start-up.
The term “artificial intelligence” has been thrown at to a wide variety of technologies, from simple computer programs that automate tasks to more complex neural networks, which are systems for processing data, and machine learning algorithms. The fact that the use of the term is so widespread has made it extremely hard for venture capital investors to distinguish between actual and “fake” AI businesses.
The UK is home to some of the most high-profile AI businesses, which have been purchased by foreign buyers, such as Google’s DeepMind, Microsoft’s SwiftKey and Twitter’s Magic Pony.