Technologies like artificial intelligence (AI) and machine learning (ML) have transformed business processes across different industries, changing how companies operate, manage finances, gather and analyse data, and build customer relations.

As the algorithms and data-driven methods continue to develop, venture capitalists are becoming more interested in investing in artificial intelligence startups providing the most beneficial solutions. According to data gathered by BuyShares, the total amount of funds AI start-ups raised over time reached £48.5bn in the second quarter of 2020, a 35% increase in a year.

More than £6.3bn funds raised in 2020

In 2010, artificial intelligence startups worldwide raised a total of £218.2m in funding rounds, revealed the CrunchBase data. In the next three years, this figure jumped to over £800m ($1bn) for the first time.

With the increasing number of investments in companies providing artificial intelligence solutions, the total funding amount reached £20.9bn in the second quarter of 2018, a tenfold increase in eight years. Statistics show that 2019 has witnessed the most significant rise in the value of investments, with the total figure growing by £15bn and reaching £42.2bn at the end of the year.

Increased investments into artificial intelligence companies continued in 2020 with the total amount of raised funds growing by £6.5bn from January to July, despite the slowdown in venture capital funding caused by the COVID-19 pandemic.

In February 2020, the Chinese autonomous vehicle startup Pony.ai announced it had raised £325m in a funding round from Toyota Motor Corporation, the most significant investment in 2020. Last year, the two companies allied in testing autonomous vehicles on Chinese public roads using Toyota’s Lexus vehicles piloted by Pony.ai’s self-driving system. The company will use the new funds to deepen the collaboration with Toyota on self-driving technological development, while making a push into mobility services in China.

In March, Chinese big data company MiningLamp raised £236m in a round led By Tencent and Temasek, the second-largest investment this year.

Statistics show that Berkshire Grey’s £207m worth funding round led by SoftBank Group represents the third-largest investment in 2020. The Massachusetts-based robotics and AI company delivering retail, eCommerce, and logistics fulfilment automation, raised funds to finance global expansion, acquisitions, and team growth.

North American AI start-ups raised £26.5bn

Analysed by geography, North America represents the leading region with a total of £26.5bn worth of investments in artificial intelligence start-ups. The US companies raised more than 95% of that amount, with California, San Francisco, and New York as the main hubs.

Statistics show Asian companies raised a total of £15.9bn in funding, ranking as the second-leading region globally. European AI startups follow with £5.7bn worth of investments so far.

The CrunchBase data also revealed that the five most active investors in this industry come from the United States. The Colorado-based global platform for investment and innovation, Techstars, ranked first on this list with 258 funding rounds so far. Statistics show that startup accelerator Y Combinator, the second most active investor, took part in 198 funding rounds. Another US innovation platform, Plug and Play, follows with 104 funding rounds. Venture capital firms SOSV and 500 start-ups ranked fourth and fifth on this list, with 99 and 83 funding rounds, respectively.