Promise or prejudice? Why are investors betting big on AI-based start-ups?

Investing on AI based startups

The Covid-19 pandemic has not been kind to most of the industries across the world. It has derailed the economic activities in various sectors, making life difficult for the budding start-ups and developing companies. As a result, investors have been sceptical about spending their money in this crisis situation.

According to certain studies, around 3-40 per cent of the tech start-ups have temporarily paused their business operations in the wake of lockdown enforced by the Covid-19 pandemic. However, AI start-ups have found many takers even amidst the global crisis. Some of these start-ups have even tapped the opportunities created by the pandemic.

Artificial intelligence and machine learning have transformed the process of global business. Venture capitalists have shown a lot of interest in Artificial Intelligence start-ups. As per a study, AI start-ups raised $61.6 bn funds in the second quarter of 2020. Many experts believe that the trend is going to continue with the increasing interest of investors in deep tech.

Investment firms have also changed their approach amidst the lockdown. Most of them are showing keen interest in the technological advancement to figure out the potential of AI-based start-ups. The companies are helping AI start-ups leverage their potential by making well-timed investments.         

On the other hand, some investors aren’t technologically advanced and often rely on case studies to find authentic and capable AI start-ups for investment. However, the success of AI firms during the pandemic has increased the trust among the investors, who are ready to make the investment even without getting into the technological aspects of these companies.

At this juncture, it would be unfair to question the proficiency of AI start-ups, and the rapid increase in the investments. The last few months have shown us that AI firms are here to stay and thrive in the long run.

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