Four in ten of Europe’s artificial intelligence start-ups demonstrate little evidence of actually using AI in their products and services, according to a new report that explores the hype around the technology.
For the study, London-based investment firm MMC Ventures, in association with Barclays, analysed 2,830 AI start-ups in Europe and based their findings on public information and interviews with executives.
The study also found that one in every 12 newly founded tech companies is an AI company.
“AI has grown rapidly over the past few years and already we’ve seen the impact on our everyday lives, from facial recognition to the recommendations we’re served up. As the technology becomes more prevalent and complex, however, it’s important to remember any AI proposition must meet two criteria: to solve a real-life problem for people, businesses and society, and to do so in a responsible and inclusive way,” said Steven Roberts, Managing Director of Barclays UK Ventures. “These two priorities are at the heart of the work we’ve done in the space, whether that be supporting start-ups and scale-ups, hosting events to demystify the technology, or connecting larger businesses to the most exciting entrepreneurs in the space. We believe that collaboration is key to ensuring AI is a force for good and we’re excited to continue playing our part in this hugely innovative environment, bringing together people, ideas and funding.”
Bursting the artificial intelligence hype
Artificial intelligence, aside from sci-fi movies, is just beginning to affect people in their everyday lives. What benefits and challenges does the tech represent?
Could the bubble burst?
Peter Finnie, Partner at IP law firm Gill Jennings and Every, said: “The term ‘AI start-up’ has now become what ‘tech company’ was to the thousands of hopeful founders looking to make themselves sound innovative and exciting following the tech boom of the early noughties. In reality, launching a digital furniture marketplace does not make you a tech start-up, nor does implementing artificial intelligence into a business make it an AI company.
“In spite of this we’ve seen a surge in the number of AI patent filings, with businesses leaning on AI in their strapline or marketing collateral in order to suggest that the technology constitutes a core part of their technology or value proposition – and therefore its investability – when that is far from the case. From an intellectual property perspective, the use of AI in this way actually holds little to no value. The AI sector is a bubble that might well burst because of this.
“The European Patent Office (EPO) recently issued fresh guidelines last year examining the patentability of AI and machine learning based on the principle that all patentable innovations must not be obvious.
“By default, the application of AI in almost every function and across every sector it touches – from AI-powered toothbrushes to AI weather forecasting tools, from medtech to fintech to e-commerce – renders such inventions obvious, unpatentable and, ultimately, far from innovative in and of themselves. What’s more, the vast majority of AI algorithms are open source, making the implementation of the technology even less innovative or intrinsically valuable. Even the EPO are looking into implementing AI in order to streamline processes. Yet this clearly does not make them an AI or a tech organisation.
“AI is simply a tool and should be viewed as such by the wider market. The AI conversation should be focussed more on how businesses use this tool to create truly groundbreaking and critical inventions that are of real, tangible benefit to the wider innovation market.”
Why is artificial intelligence overshadowing RPA?
Technology firm V1, has warned that companies are in danger of missing out on major operational efficiencies because they are blindsided by AI. Although AI is tipped to transform business, many firms aren’t yet ready to adopt it and should instead be looking towards RPA which is more accessible