AI startups are being scooped up at an accelerating pace, many by companies outside the tech sphere.

What’s new: A report by CB Insights shows that, as of August, 2019 was on track to surpass last year’s record number of AI startup acquisitions. The annual tally has grown an average of 38 percent every year since 2010.

Who’s buying: While tech giants buy more startups on average, non-tech companies account for the overwhelming majority of purchases.

  • Apple has the biggest portfolio, having acquired 20 AI startups since 2010, including the companies behind popular features like Siri and FaceID.
  • Amazon, Facebook, Google, Microsoft, and Intel are the other notable customers, each having acquired at least seven companies working on computer vision, natural language processing, speech recognition, and the like.
  • Most acquisitions by far have been one-off purchases by incumbents outside tech. For instance, John Deere, McDonalds, and Nike snatched up companies that help do things like harvest crops, develop customer relationships, and manage inventory.

What they’re paying: Seven AI acquisitions topped a billion dollars. The most recent happened in April, when pharma giant Roche Holdings closed its $1.9 billion purchase of cancer analytics provider Flatiron Health. The report doesn’t provide annual spending totals.

Why it matters: The report makes a strong case that AI’s strategic value is rising steadily throughout the economy. AI is still a tech-giant specialty, but it’s becoming essential in industries well beyond the internet and software.

We’re thinking: Exciting startups attract talent, and their work leads to acquisitions that supercharge innovation with bigger budgets and wider reach, drawing still more people into the field. The latest numbers show that this virtuous cycle has staying power — enough, perhaps, to overcome the ongoing shortage of machine learning engineers.


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