July 6, 2023 – Solganick has published its latest industry snapshot on the artificial intelligence (“AI”) industry sector. It covers the latest funding and M&A transactions as well as a macro analysis and viewpoint of the sector.
Here is a brief summary of the report:
The demand for artificial intelligence has boosted the technology sector over the last 12+ months and will continue to support strong growth in jobs, capital, and M&A activity.
Global AI Industry & Evolving Use Cases
- The global AI market is projected to reach nearly $1 trillion by 2030, driving diverse implementations and use cases across industries as organizations leverage AI to unlock new opportunities and drive innovation.
- AI’s potential economic impact is immense, with an estimated $15 trillion
expected to be added to the global economy by 2030, surpassing the combined output of China and India. This underscores the importance of strategic AI implementations in harnessing its transformative power for
economic growth and gaining a competitive advantage.
- The adoption of AI capabilities is on the rise, with organizations integrating an
average of 3.8 AI capabilities per organization in 2022. This growing recognition of AI’s potential across sectors, from robotic process automation to
computer vision and natural-language processing, streamlines processes, enhances decision-making, and unlocks new efficiencies.
- AI technologies have already demonstrated their value, with 80% of executives reporting noticeable productivity and performance improvements within their organizations. This tangible impact has further driven AI implementation, as organizations witness firsthand the benefits of AI adoption. By leveraging AI, businesses can achieve greater operational efficiency, reduce costs, improve customer experiences, and gain valuable insights from data-driven decisions.
- The AI industry continues to attract substantial investments, with over 50% of organizations allocating more than 5% of their digital budgets to AI initiatives. This growing confidence in AI’s potential fuels continuous innovation and expands the range of AI use cases, propelling the industry forward and empowering organizations to stay at the forefront of AI adoption.
- The AI industry presents an attractive investment opportunity for strategics and venture capitalists. However, developing, training, and running AI systems have historically required significant capital investment. This interdependence between AI and capital has led to a rise in M&A activities and funding.
- In the first quarter of 2023, AI accounted for 186 technology deals, with a combined value of $12.7 billion. Notably, Microsoft’s investments in OpenAI for $10 billion represented the largest disclosed funding in the industry.
- The interest in early-stage VC investments in generative AI startups has surged dramatically.
- In 2022 alone, these startups raised an impressive $2.6 billion
across 110 deals. This influx of funding showcases the confidence and excitement surrounding the potential of generative AI.
- AI’s interdependence with capital has led to increased strategic investments and M&A, which seems to be a trend that will continue to boom this decade.
Solganick & Co. covers the artificial intelligence industry sector and provides sell-side M&A advisory services to fast growing companies in the sector. For more information, please contact us.