Investment in artificial intelligence companies soars

Investment in machine learning companiesInvestment in machine learning or artificial intelligence technology companies has touched $16.8 billion till November 2017.

Some of the leading technology companies that are making investment in AI include Apple, Cisco, Facebook, Google, HPE, Intel and Microsoft.

Buyers announced 87 transactions totaling announced or estimated spending of $16.8 billion though November, according to 451 Research’s M&A KnowledgeBase.

The current spending for acquiring machine learning companies is more than four times the amount spent in 2016.

Prior to 2017, technology companies spent just $9.4 billion to acquire 177 machine-learning or artificial-intelligence companies.

451 Research tracks acquisitions of companies that offer machine-learning or artificial-intelligence technology or products.

“Machine learning is being felt more widely than those two prior trends; M&A activity has spanned the entire technology stack from chips to SaaS as vendors move to make sure they’re at the vanguard of a technology that will reshape our personal lives, work lives, education and leisure,” said Nick Patience, research VP, Software at 451 Research.

The biggest transaction was Intel’s $15.3 billion purchase of Israel-based MobileEye in March to add semiconductors for assisted and autonomous vehicle applications to its portfolio. That deal, at 41 times trailing 12-month revenue, holds the record for the highest multiple ever paid for a company with more than $100 million in trailing revenue.

Software companies account for about two-thirds of the targets, with business intelligence and customer relationship management (CRM) making up about a third of all targets. In the business intelligence segment, for example, TIBCO acquired two machine-learning companies that enable predictive analytics.

In the security category, which accounted for 17 percent of targets so far this year, we saw deals such as Cisco’s acquisition of Observable Networks, which uses proprietary machine-learning technology to enhance its security monitoring capabilities.

Google/Alphabet holds the record for the number of machine-learning deals over time with 11 transactions announced so far. IBM, which is placing a big bet on its Watson AI unit, is runner-up with nine acquisitions in total.

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