Most “AI” Startups are Data Startups
That being said, riding the wave of deep learning with a unique dataset can be extremely profitable.
Data is what makes the largest technology companies so valuable. A good estimation is that Google knows your preferences better than your parents.
Facebook makes over $26 a year off it’s most active users. This is all from having the best data on the web — they know your location, your spending habits, and your concerns. Data access and control is driving the technology landscape.
Let’s look at some of the most valued “AI” Startups that raised more than $100million in 2019. I did some digging on each, and I’ll reframe their application as a new data access solution. Even what the companies self-advertise as is intriguing.
- Vacasa — Vacation Rental Management: This one doesn’t even sound like AI at all. This is the Airbnb for creating new home rentals. They have all the data to know what properties to build. They claim “AI-driven tools make it possible to deliver this consistent experience in unique vacation homes around the world,” but realistically I would guess this is basic regression and decision trees.
- Samsara — Industrial IoT: They should say — web-connected sensors. This is a great business, they are going to sell a ton of products to people looking to broaden their data pipeline.
Smart cameras give rich data and can connect to the cloud. It’s all in the first sentence of the story, except for how AI will help them provide products, “We believe that inexpensive wireless data, AI, and an explosion in camera technology has made it easier for organizations of all types to gather data in ways not possible before.”
- TripActions — Corporate Travel & Expense Management: I included this one to prove that some of the AI company press frenzy is just chaos. There’s no mention of AI on the ‘about’ page, or automation for that matter, just “A travel platform that takes care of business and your travelers.”
- ThoughtSpot — Search & AI-Driven Analytics: This company takes enterprise data (emails, logistics, etc) and finds trends for them. The AI-Driven insights will provide a service so good that “anyone can find insights hidden in their company data in seconds.”
Another example of give us your data, we will do some analysis on it, and make you better. I am sure it works for companies that don’t have time to do the analysis themselves. The best part is middle-man data companies get better with every extra costumer.
- CloudMinds — Operating Smart Robots for People: This is a startup that wants to bring affordable robots to homes by 2025. I’m onboard — great to find it early. The motto: “we can make Robots as smart as a human by using a cloud brain.” Sharing data isn’t necessarily a cutting edge innovation in AI, but you get the point. Again data comes up, but in this case it’s data sharing.
- Icertis — Enterprise Contract Management in the Cloud: Icertis is the leading provider of contract lifecycle management in the cloud. Not to beat a dead horse, but I think the value gained here is mostly from having the most data.
- SparkCognition — Cognitive AI: This is the first one to come up that seems like it might be doing some impactful AI research — “We build artificial intelligence systems to advance the most important interests of our society.” Consulting-based AI companies are going to be big. I’m curious if any of the big names in consulting swallow them up before they start taking market share.
- Vectra AI — AI-driven Threat Detection and Response Platform: Haven’t heard of this one, but Vectra is “the world leader in applying AI to detect and respond to cyberattacks,” according to themselves. I’m guessing this is some cool time-series regression and a lot of data. Could be some awesome machine learning here, I will give them credit. Right on.
- Scale — The Data Platform for AI: Data labeling services ultimately. I have met multiple people at Scale, they all seem great, and I give them my seal of approval. They took what used to be the bane of graduate students, data management, and made it seamless. This company is going to be around for decades (or get bought soon).
- AutoX — Democratizing Autonomy: When you encounter an autonomous vehicle startup, you should always ask yourself, “how is this one different?” The claim here is “building the safest AI driver,” but I am not sold from their website. Time will tell. The only autonomous vehicle company doing impactful AI now is Tesla — they have end-to-end learning trained on billions of miles. I’m sure a couple will catch up
I am a little surprised how little of them are AI-forward considering the press they get all involve computer intelligence. AI will bring in the eyes, and when you deliver a product on useful data, no one (especially investors) will think twice. Most of the companies have a clear data-leverage, and a couple of them have a problem space that seems truly innovative.
I sourced the most recently funded startups from this article. I had to remove a few of the companies because they’re not intelligence startups, but they’re digital and making waves.
Source — the author’s old day job.
True AI Startups are Coming
We can see the wealth created by these companies just by having access to the data. In the next decade, innovations in machine learning will be regular and impactful. The 2010s was the emergence of big data and it’s boons — I think the 2020s will be determined by who has the best AI. The best AI will get the most consistent views, it’ll have the lowest logistics costs, and much more.
Machine learning breakthroughs and data infrastructure in the last decade are setting the stage for the 2020s to be filled with truly AI-leveraged unicorns.
I am worried that the looming recession will cause increased aggregation in the technology industry. The economics are simple, but the more these companies know, the more they’ll rewire our brains to make money.