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Laxman Pai, Opalesque Asia:

The global investments by venture capitalists (VC) in private companies focused on artificial intelligence (AI) are growing at a dramatic pace, said a study.

According to a new report from the Organization for Economic Cooperation and Development (OECD), the U.S. and China lead the growing wave of funding, taking in a combined 81% of the total amount invested in AI startups last year, while the European Union and the U.K. boosted their backing but lag substantially behind.

The study analyzed venture capital investments in 8 300 AI firms worldwide, covering 20 549 transactions between 2012 and 2020.

The global annual value of VC investments in AI firms has grown dramatically, from less than USD 3 billion in 2012 to close to USD 75 billion in 2020.

Investments increased 20% last year alone. Start-up firms based in the United States and China absorbed more than 80% of their investments in 2020. The European Union followed, with 4%, and the United Kingdom and Israel, both at 3%. Within the EU, AI firms based in Germany and France accounted for about two-thirds of VC investments both in 2020 and since 2012.

Growth in AI investment in US-based firms has been steady from 2012 onwards, reaching USD 42 billion in 2020 (57% of the total). Investment in Chinese firms experienced a spike in 2017 and 2018, followed by a slump in 2019, representing USD 17 billion in 2020 (24%).

VC investment in AI was distributed across more firms in......................

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