The Global Artificial Intelligence Landscape
- The US is the global market leader for Artificial Intelligence with 40% market share
- China (2nd) and Israel (3rd) have the next strongest AI ecosystems
- Most other countries lack the needed combination of research, entrepreneurship, funding and M&A to build a sustainable and competitive AI ecosystem
- Globally there are too many chatbots and too few real-problem-solving applied AI solutions
In early 2017, we published the German AI Landscape, and later in 2017, we created the European AI Landscape. We determined that London, Paris, and Berlin were strong individual hubs for Artificial Intelligence. However, we wanted to know how cumulative Europe compares to the global AI landscape.
We started by collecting a list of over 7,500 companies claiming to build Artificial Intelligence solutions. We cleaned the data, sorted, and analyzed it. In partnership with Roland Berger, we published a report about our findings. The result is the first Global Artificial Intelligence Landscape. Enjoy!
Top Countries in the Race for Artificial Intelligence USA is the clear world market leader for Artificial Intelligence
It’s not surprising to say that the United States of America is the clear market leader for Artificial Intelligence. By far, the US has the strongest AI ecosystem in terms of funding, number of companies and global reach. A total of 40% of all AI companies are based in America. The number would be even higher if we consider all AI companies with a sales office or headquarters in the United States while their core technology team is located somewhere else, such as Poland, Israel, or France.
America’s leadership is the result of a mature, well-financed, and thriving digital ecosystem in Silicon Valley and the New York/Boston metropolitan area. Over 16 governmental agencies support AI companies financially and politically (including DARPA, CIA and NSA). The US also has leading universities (like Stanford and MIT), as well very strong corporate research facilities (like Google DeepMind).
The US is a role model in terms of how a technological industry can grow strongly when governmental stimulation, applied research by universities and corporations, entrepreneurship, private funding, and a thriving M&A market play well together.
China is number two in the world for AI
The most astonishing result for us is that China is number two for Artificial Intelligence in the world. Approximately 11% of all AI companies are based in China.
For some, it might be no surprise because China has publicly announced its intention to be world leader for AI by 2030. Artificial Intelligence is part of the country’s ambitious 5-year development plan. The government pumps billions into research centers in Beijing and Tianjin. The market for startups is very well-financed, and valuations are even higher than in Silicon Valley. China has the strongest growth by published academic papers and a surprisingly high number of AI startups.
China shows that with political willpower, adequate funding, and a clear strategy, a country can become an influential Artificial Intelligence player within years.
Israel is technologically strong and underestimated
We Europeans expected Israel to be fairly strong on AI. However, we were surprised that Israel is now number three in the world for AI solutions. With only 8.5 million citizens, Israel has a market share of 11% and is equal to China. Israel has 40x more AI companies per capita than the market leader USA, and that makes Israel the clear hidden champion of Artificial Intelligence.
One reason for the country’s AI leadership is the close connection between the Israeli military and the digital sector. However, Israel has a long history of deep technology companies, not only for AI. There are quality universities (including Technion, Bar-Illan, Ben-Gurion, Jerusalem) and a strong entrepreneurial ecosystem in Tel-Aviv.
United Kingdom is raising the bar for Europe
In our European AI landscape, we already identified the United Kingdom as the leading country for Artificial Intelligence in Europe. With a market share of 7%, the UK stands well in international competition for AI funding, research, and talents.
From our view, London is a global financial hub, and therefore funding for AI companies in the UK is significantly greater compared to other European countries. Additionally, the UK government has for years created an entrepreneurship and investor friendly environment. London’s M&A market works well, English is the region’s main language, and the UK has many excellent universities (including Oxford and Cambridge).
Canada, Japan, France, Germany and the rest of the world
For veterans of the AI industry, Canada is not an unknown player and is currently number five on the Global AI country ranking. While Canada promotes entrepreneurship-friendly politics, the main reason is the Deep Learning Mafia from Toronto. Yoshua Bengio, Geoffrey E. Hinton, and Yann LeCun are three main drivers of the Deep Learning renaissance of the past six years, and they chose Canada as their original research hub.
Canada is even in market share (3.8%) with Japan (3.1%), France (3.1%), and Germany (3%). All are strong economies with a large domestic market.
However, compared by size of economy, we’re especially disappointed that France and Germany’s efforts to develop AI industry leadership capacity are small in contrast to the USA, China, and Israel.
The same goes for many more countries like India (nine), Spain (13), Brazil (17) and Rusia (20). Most of these countries have a huge shortfall of Artificial Intelligence companies, and we see much struggle in their future. Unless those lagging countries invest significantly more effort and capital to reduce their AI deficit, they’ll be highly dependent on AI solutions from China, USA, and Israel.
Top Cities Worldwide for Artificial Intelligence
As expected, the greater Silicon Valley area is the world’s largest AI hub, followed by London, Tel Aviv, New York, and then Beijing. Boston, Tokyo, Shanghai, Los Angeles, and Paris are still in the Top Ten 10 for global AI cities. Berlin, Toronto, Shenzhen, and Seoul follow closely.
City hubs are essential for growth of a strong AI industry. In those hubs, capital, talent, and ideas are nurtured under high pressure, fast iteration, and fierce competition. Those who win the battle for employees, investors, and clients in their hub have the potential to grow into a world leader.
Applied AI Solutions Aren’t Deep-Tech Enough
We see this daily in our Asgard deal flow. Currently, most AI startups are solving “low-hanging fruit” problems in communication (an army of chatbots and dialog systems), sales, and marketing. Those are the three main verticals globally, and no country is out of the norm.
We’re happy to see that healthcare, computer vision, and core AI are also strong verticals for applied AI.
However, we’re mildly disappointed to discover a lack of AI companies for manufacturing, education, and disruption of legal/insurance/enterprise industries. We hope to see our generation of entrepreneurs moving past easier projects to tackle complex (and more important) challenges.
Asgard — Human Venture Capital for Artificial Intelligence is a Berlin-based investment firm with focus on early stage artificial intelligence companies. Asgard was founded in 2014 by serial entrepreneur and investor Fabian J. G. Westerheide.
Roland Berger, founded in 1967, is the only leading global consultancy of German heritage and European origin. With 2,400 employees working from 34 countries, Roland Berger has successful operations in all major international markets. Roland Berger’s 50 offices are located in the key global business hubs. The consultancy is an independent partnership owned exclusively by 220 Partners.
We would like to thank the Roland Berger team for their help. It was the idea of Roland Berger’s CEO Charles-Edouard Bouée to work together. Tobias Rappers and Axelle Lemaire were the driving forces behind the project.
As usual, please leave your feedback and thoughts. We’re happy to discuss our findings. And please share the results! Our world has to become smarter, and we need more AI for a better human future.