Artificial Intelligence (AI) has been around since the term was coined in 1955 by John McCarthy. AI is on its third life after the first one ending in the 70s when funding from US federal sources dried up and the second one ending after the crash of the LISP machine market. It appears that in its third reincarnation that started in the 90s, AI is here to stay for the long run. The field of AI has expanded to various fields as shown in the classification (chart 1).


Thanks to advances in computing, networks, storage, big data, and neuroscience AI is getting more accurate in prediction. Its applications are ubiquitous in both consumer and industrial settings. We use it daily on our smart phone in the form of automatic word completion in the text editor and face recognition to log on. It is seen in toy drones, home help robots and self-parking cars. Industrial applications are common place from aerospace and agriculture to recruiting and wealth-management.

The US has become the hotbed of innovation in AI and has captured a leadership position in terms of university research, patents, startups funded, commercial and military use. In 2014, IBM and Microsoft had more patents granted in AI and ML in 2014 than all other tech companies (chart 2).


In order to better understand which areas within AI are seeing most disruption we created a database of 2800 companies that are innovating in all the areas (as shown in chart 1)of AI and ML (machine learning). For the study, we also included areas that span multiple fields such as drones, image recognition, and augmented reality. We winnowed the 2800 companies down to 1781 active companies depending on whether they were acquired, closed down, or went bankrupt. More than half of the active 1781 companies are located in the US (chart 3).

We further narrowed the list of companies based on who had received funding. Only 18% (312 companies) of the 1781 active companies have funding >$100k.

Chart 4: Funded Companies by Location


Out of the 312 funded companies, nearly 40% are located in the San Francisco Bay area with more than 70% in North America (chart 4).

A vast majority of the funded companies are still pre series A, or in other words, in early stages of development (chart 5).


Venture funding in AI / ML companies increased 300% in 2014 as compared to 2013 (chart 6).

Intel Capital, Google Ventures, Khosla Ventures and Two Sigma Ventures are the most active VCs investing in the area (chart 7).

Machine learning, drones / robotics, augmented reality and image recognition are the most actively funded areas (chart 8).

70% of AI and ML innovation is targeted toward enterprise applications (chart 9) across a wide range of industries from Aerospace to Wealth management (chart 10).Surprisingly, “AI / ML as a service” is the second most prevalent application area after industrial automation.

Acquisitions are also happening at a brisk pace and Google is the most acquisitive tech company in the space (21 acquisitions) followed by Facebook (10) and Apple (6) (chart 11).

There is a lot of literature and press covering various uses of AI and ML. We have compiled a list of companies that we thought stood out in the following verticals:


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