Human-like artificial intelligence captures the public's imagination, like the controversial portrait of the robot Erica or movies like Her. But it's block-and-tackle problem solving artificial intelligence that's capturing private pocketbooks. Like, a big share of private pocketbooks. Investors poured $22 billion in AI startups over the last 5 years, according to CB Insights AI deal tracker.
While the usual suspects are active--like Facebook acquiring Ozlo, Google acquiring AIMatter, or Amazon acquiring Harvest.AI--more and more deals are going to non-traditional tech acquirers. Last week, for example, agriculture leader John Deere offered $305 million to acquire a 60 person AI startup that sprays herbicide. "Machine learning is an important capability for Deere's future," President John May commented, speaking to trade journal Feedstuffs. He's not alone. This summer, companies like Lyft, Hubspot, NASDAQ, Qualcomm, Workday, Meltwater, and ServiceNow bolted on new AI companies.
The soaring price of proven AI talent
It's not just the tech, but also the talent, that's driving deals. Seasoned SalesForce acquisition dealmaker John Somorjai explains typical AI deal rationales in Fortune:
I have yet to see a large AI-centric business for enterprise cloud. These are about technology and talent. And we structure the deals to incent the talent to stay. We've acquired a lot of really seasoned tech leaders that have grown to be leaders in our own company and that is one thing I'm really proud of. Half of our clouds are run by people that came from an acquisition.
People still solve problems, even artificial intelligence problems.
Companies are also using AI acquisitions to help research extending their core business. Qualcomm said, when it acquired AI start-up Scyfer recently, that, "We envision a world where AI makes devices, machines, automobiles, and things much more intelligent, simplifying and enriching our daily lives.
Qualcomm's statement also highlighted talent. "The acquisition of Scyfer brings with it a founder and renowned professor at the University of Amsterdam, Dr. Max Welling, which will help to further advance AI research and development at Qualcomm Technologies."
It's just the beginning of the artificial intelligence funding wars.
There are several fronts. In recruitment, the top 20 AI recruiters already spend upwards of $650 million a year looking for AI talent, according to recruiter Paysa. In finance, there is almost $700 million invested in undeployed private equity scheduled to be invested in the next handful of years, much of it trained on strategic tech acquisitions, according to Pitchbook. In politics and economics, Vanguard's chief global economist Joe Davis recently predicted 47% of jobs will be automated away. Governments are grappling with protecting workforces and GDP even as some top global economists are saying automation makes GDP irrelevant.
Only thing is certain: before many of the promises of artificial intelligence are realized, more heroic sums will be spent paving the way and hopefully, protecting the many whose jobs are directly affected.