Chinese AI Startups Overtake US Firms in VC Backing: Report

Chinese AI startups have now overtaken their American counterparts in attracting investment, according to a new report from ABI Research. The report asserts that China-based AI firms raised $5 billion in venture capital in 2017, compared to $4.4 billion raised by firms in the US.

Notably, the Chinese firms raised $4.9 billion from 19 investments, whereas the American firms raised their $4.4 billion from 155 investments. According to ABI Research’s analysis, this disparity reflects “a sharp focus by the investors on mature AI applications with strong commercial viability and successful use cases.” But it also is a reflection of the influence of the Chinese government, which has demonstrated a focused interest in providing the right regulatory and market environments for AI development, including its own backing of investment firms pouring money into AI.

Chinese firms highlighted in ABI Research’s report including Bytedance, which raised more than $3 billion thanks to excitement over its news aggregation and video clip apps; facial recognition specialists SenseTime and Face++; and AI chipset developers Cambricon Technologies, which is focused on smartphone applications, and Horizon Robotics, which aims more at the automotive sector.

While these Chinese firms have helped to lead the country’s massive growth in AI, the investments seen on both sides of the Pacific has shown a strong upwards trend. ABI Research says that overall investment shot up 150 percent year-over-year, rising from a total of $4 billion in 2016 to $10.7 billion in 2017. And if the activity seen this year is any indication, that trend is going to keep going.