Acquisitions accelerate as tech giants seek to build AI smarts
Acquisitions accelerate as tech giants seek to build AI
smarts
By Julia Love | SAN FRANCISCO Fri May 26, 2017 | 3:26pm
EDT
A total of 34 artificial intelligence startups were
acquired in the first quarter of this year, more than twice the amount of activity
in the year-ago quarter, according to the research firm CB Insights.
Tech giants seeking to reinforce their leads in
artificial intelligence or make up for lost ground have been the most
aggressive buyers. Alphabet Inc's Google has acquired 11 AI startups since
2012, the most of any firm, followed by Apple Inc, Facebook Inc and Intel Corp,
respectively, according to CB Insights.
The companies declined to comment on their acquisition
strategies. A spokesman for Apple did confirm the company's recent purchase of
Lattice Data, a startup that specializes in working with unstructured data.
The first quarter also saw one of the largest deals to
date as Ford Motor Co invested $1 billion in Argo AI, founded by former
executives on self-driving teams at Google and Uber Technologies Inc.
Startups are looking to go deep on applications of
artificial intelligence to specific fields, such as health and retail, industry
observers say, rather than compete directly with established companies.
“What you will see is very big players will build
platform services, and startup communities will migrate more to applied
intelligent apps,” said Matt McIlwain, managing director of Madrona Venture
Group.
Healthcare startup Forward, for example, is using
artificial intelligence to crunch data that can inform doctors’
recommendations.
“For people who really want to focus on core AI problems,
it makes a lot of sense to be in bigger companies,” said Forward Chief
Executive Officer Adrian Aoun, who previously worked at Google. “But for folks
who really want to prove a new field, a new area, it makes more sense to be
separate.”
Artificial intelligence companies that do remain
independent field a steady stream of suitors: Matthew Zeiler, chief executive
of Clarifai, which specializes in image and video recognition, said he has been
approached about a dozen times by prospective acquirers since starting the
company in late 2013.
Clarifai’s pitch to customers such as consumer goods
company Unilever Plc and hotel search firm Trivago is bolstered by its narrow
focus on artificial intelligence.
“(Google) literally competes with almost every company on
the planet,” Zeiler said. “Are you going to trust them with being your partner
for AI?”
Tech giants have been locked in a bidding war for academics
specializing in artificial intelligence. Startups rarely have the capital to
compete, but a company with a specialized mission can win over recruits, said
Vic Gundotra, chief executive of AliveCor, which makes an AI-driven portable
heart monitor.
“They say, ‘I want to come here and work on a project
that might save my mother’s life,’” Gundotra said.
(Reporting by Julia Love; Editing by Jonathan Weber and
Lisa Shumaker)
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