Tech Investors Remain Bullish on AI Startups

Article By : George Leopold

Has global investment in AI and machine learning technologies peaked?

Has global investment in AI and machine learning technologies peaked?

Our colleague Peter Clarke, compiler of the annual Silicon 100 Startups Worth Watching, suspects that’s the case as AI startups fall short of early promises or are snapped up by established chip makers.

“We have about 25 or 29 AI companies on the list, who all think they are going to win the market either in the data center space, some of the bigger chips and the more expensive startups [that] are shooting for the data center business,” Clarke noted during a recent EE Times podcast.

“Many others say they’re going to do AI at the edge,” Clarke added. “History tells us there’s going to be one or two victors in each space. These other companies, I’m afraid, will miss out in one way or another.”

A potential winner, at least in the current AI funding sweepstakes, is Palo Alto-based SambaNova Systems Inc. The Silicon 100 listee recently announced a $676 million venture funding round led by Softbank. According to the web site Techcrunch,com, SambaNova has so far raised $1.1 billion, and claims a market valuation in the neighborhood of $5 billion.

Early investors include BlackRock, Google Ventures, Intel Capital and Walden International. The high-flying AI startup recently announced the addition of Wade Shen to its advisory board. Shen previously oversaw AI and machine learning programs at the Defense Advanced Research Projects Agency.

(Click on image to enlarge.)

According to VC industry tracker GlobalData, total AI venture financing deals in North America totaled $9.5 billion during the second quarter of 2021. That represents a 17.7 percent increase over the previous quarter, the market analyst said this week.

GlobalData reported 290 VC investments in North American AI developers between April and the end of June, a slight decrease over the first three months of this year.

SambaNova Systems’ haul and four other deals accounted for nearly 22 percent of VC investments during the previous quarter, or $2.05 billion.

Other winners during the second quarter included Anduril Industries, which closed a $450 million funding round, and Groq, which pulled in $300 million in venture funding, GlobalData reported.

Aduril, Irvine, Calif., develops AI technologies for drones and other national security applications. Groq, another Silicon 100 listee, was founded by former Google engineers who helped develop the search giant’s Tensor processing unit—ASICs designed to accelerate machine learning workloads.

Other AI developers raking in big VC bucks in the second quarter included Scale AI ($325 million) and Toronto-based Easy Education, which concluded a $300 million funding round.

GlobalData’s quarterly estimate also revealed a growing list of venture firms betting on AI startups, reporting there was virtually no overlap among investors in its top five AI startups.

“Traditionally, U.S.-based VC investors have remained proactive in keeping an eye on investment opportunities in startups that are active in disruptive technologies, with AI being among them,” notes Aurojyoti Bose, lead analyst at GlobalData.

This article was originally published on EE Times.

George Leopold has written about science and technology from Washington, D.C., since 1986. Besides EE Times, Leopold’s work has appeared in The New York Times, New Scientist, and other publications. He resides in Reston, Va.

Subscribe to Newsletter

Leave a comment