Study Id59297 Artificial-Intelligence-Ai PDF

ARTIFICIAL
INTELLIGENCE
(AI)
October 2018
Agenda
01 Economic Impact of AI 05 AI Technologies & Enablers
▪ GVA, GDP & jobs ▪ AI types & categories
▪ Market size ▪ AI frameworks/computing & semiconductors
02 Leading Countries 06 Applications & Industry Impact

▪ Experts, papers, patents ▪ Major use cases
▪ Funding & companies ▪ Industry & sector impact
03 AI Investment Today 07 Summary & Outlook

▪ Venture capital and funding
▪ Major deals
04 Leading Companies
▪ Investments
▪ Patents & papers
2
Executive summary
Digital transformation, transhumanism, Internet of Things, connected world, smart everything, Industry 4.0, nanotechnology,
biotechnology, quantum computing, big data, 5G, automation, smart robots…. Is your head spinning yet? Don’t worry, we got one more
for you: artificial intelligence (AI). Welcome to the cognitive era.
Today the world is in an age of fundamental change that by some is considered the Fourth Industrial Revolution and also referred to as
the cognitive era. Artificial intelligence is at the center of this development as fully fledged AI has the potential to disrupt every industry in
the economy and basically all aspects of human life within the next 20 to 50 years.
Currently, artificial intelligence is in an era of exploration where new technologies and ideas are emerging constantly. It is transitioning
from the development of underlying theoretical concepts (e.g. machine and deep learning, neural networks) to having a real-life impact
across a multitude of industries, verticals and products. This includes fields such as health care, retail & e-commerce, transportation,
finance, national security, energy smart cities and much more.
Virtual digital assistants such as the Google Assistant and Apple’s Siri are already part of the consumer market’s mainstream.
Autonomous driving is expected to fundamentally transform transportation; and applications such as robot-assisted surgery, virtual
nursing assistants, and medical imaging will have a strong impact on the healthcare market
This dossier provides insights into the potential economic impact of AI and current investment trends, including which countries are in
the lead, major companies, and the enabling technologies. Major use cases and applications of AI across several industries and
verticals are also covered.
3
Artificial intelligence timeline
1943 Warren McCulloch / Walter Pitts conceive the first neural network
1950 Turing test: test of a machine‘s capability to exhibit intelligent behavior equivalent to, or indistinguishable from, that of a human
1956 John McCarthy coins the term Artificial Intelligence (Dartmouth Summer Research Project on Artificial Intelligence (DSRPA)
1959 First definition of machine learning by Arthur Samuel („Field of study that gives computers the ability to learn without being explicitly programmed“)
1974-1980 First „AI winter“ – lack of progress leads to substantial cuts in funding
1975 Kunihiko Fukushima develops the first true multilayered neural network
1987-1993 Second „AI winter“ period – market for specialized AI hardware collapses; funding is cut once again as ambitious goals are not met
1997 IBM‘s Deep Blue defeats Gary Kasparov, the world‘s chess champion at the time
2006 Geoffrey Hinton shows how neural networks can be improved by adding more layers to the network (deep learning).
2009 Andrew Ng describes how GPUs can be used to accelerate the mathematical calculations required by convolutional neural networks (CNNS)
Mid-2010s Beginning of the cognitive era
2011 IBM‘s Watson Q&A machine wins Jeopardy!
2011 Apple introduces first virtual digital assistant Siri to the market
2014 Amazon launches Alexa
2016 AlphaGo (Google DeepMind) beats Lee Sedol
2017 China‘s Ministry of Industry and Information Technology (MIIT) publishes its Next Generation Artificial Intelligence Development Plan
2018 „Edmondde Belamy“ is the first work of art created by AI sold at an auction (price $432.5k)
Major car manufacturers (like Daimler, BMW, Ford, Honda, Toyota, Volvo, Hyundai, Renault-Nissan) aim to have highly-automated cars ready for the
2020/21
market
2025 Quantum computing
4
01 Economic Impact of AI
▪ GVA, GDP & jobs
▪ Market size
Artificial intelligence will have major economic impact
Creating a reliable forecast that estimates the economic impact of artificial intelligence using “The new spring in AI is the most
numbers alone is impossible. Evaluation and comparison of industry forecasts show that the significant development in
overall market for artificial intelligence is projected to generate tens of billions in revenue by the computing in my lifetime. Every
mid 2020s. month, there are stunning new
Forecasts on the impact of artificial intelligence (in dollar value) may differ, but one thing everyone applications and transformative
agrees on is that artificial intelligence will be a disruptive force – not only across every industry and new techniques. But such
sector, but for society as a whole. Projections show that by 2030 artificial intelligence has the powerful tools also bring with
potential to enhance the gross domestic product by ten percent or more. This is mainly through them new questions and
product enhancements and productivity gains. responsibilities.”
China and the United States are set to benefit the most from the continuous advancement of – Sergey Brin, Google co-
artificial intelligence and its neighboring technologies. For example, increased productivity from founder and President of
labor substitution in the United States is projected to increase the country’s GDP by 15 percent by Alphabet
2030.
The effect of artificial intelligence will be felt strongly in the job market, impacting employment
across many industries. For instance, around 70 percent of jobs in the transportation and logistics
industry in North America are at high risk of automation by 2030. Additionally, the share of
machine working hours is forecast to increase by ten or more percent across most work tasks and
activities.
6
Market size and revenue comparison for artificial intelligence worldwide from 2016 to 2025 (in
billion U.S. dollars)
Artificial intelligence (AI) market size/revenue comparisons for 2016 to 2025
IDC (September 2018) Tractica (June 2018) MarketsandMarkets (February 2018)

Grand View Research (July 2017) Frost & Sullivan (November 2017) Rethink (July 2018)
Allied Market Research (September 2018) UBS (January 2018)
250
200
Market size in billion U.S. dollars
150
100
50
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Note: Worldwide; 2018

Source(s): Grand View Research; MarketsandMarkets; IDC; Tractica; Frost & Sullivan; Statista; UBS
7
Potential aggregate economic impact of artificial intelligence worldwide in the future (in trillion
U.S. dollars)
Global potential aggregate economic impact of artificial intelligence in the future
Low estimate High estimate
0.9
0.8
0.8
Ecnomic impact in trillion U.S. dollars
0.7
0.6
0.5 0.5 0.5
0.5
0.4 0.4 0.4 0.4
0.4
0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
0.3
0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2
0.2
0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
0.1

Source(s): McKinsey
8
Projected increase of GDP due to artificial intelligence by industry sector in 2030
Impact of artificial intelligence on GDP worldwide as share of GDP 2030
GDP gains associated with product enhancements GDP gains associated with productivity
25%
20% 8.5%
15%
GDP increase
6%
5.5%
12% 5.5% 5.5%
10% 4%
4%
9%
7%
6.5% 6.5% 6.5%
5% 6%
0%
Other public and personal Consumer goods, Technology, media and Energy, utilities and mining Manufacturing and Transport and logistics Financial and professional
services accomodation and food telecommunications construction services
services

Source(s): PwC; Statista estimates
9
Impact of artificial intelligence on the gross domestic products (GDPs) worldwide in 2030, by
region (in percent/trillion U.S. dollars)
Increase of GDPs globally due to artificial intelligence 2030
GDP growth due to AI in % GDP growth due to AI in trillion U.S. dollars The mature economies of the United States,
30 Europe, and Asia (Japan, South Korea,
Australia, Singapore etc.) are forecast to
26.1 profit from the development and application
of artificial intelligence on somewhat the
GDP growth in percent and trillion U.S. dollars
25
same level. China is projected to maximize
the potential of artificial intelligence due to
20 its more dynamic overall economic growth
and the Chinese’s government strong focus
on it as a national strategy (more details on
15
14.5 China‘s AI policy in country chapter).
11.5
9.9 10.4
10
7
5.4 5.6
5 3.7
1.8
0.7 0.9 1.2
0.5
0
China North America Northern Europe Southern Europe Developed Asia Latin America Rest of world
Regions

Source(s): PwC
10
Incremental GDP increase based on impact of artificial intelligence by economic driver in the
United States by 2030
Economic impact of AI on GDP in the United States by 2030, by driver
GDP increase
-15% -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40%
Augmentation 4%
Increased productivity from labor substitution 15%
Innovation / market extension 10%
Global data flows 2%
Wealth creation / reinvestment 6%
Gross impact 37%
Transition costs -8%
Negative externalities -7%
Net impact 21%
Note: United States; 2018

Source(s): ITU; McKinsey
11
Share of jobs at high risk of automation by 2030, by region and industry sector
Share of jobs at high risk of automation by region and industry by 2030
Energy, utilities and mining Manufacturing and construction Consumer goods, accomodation and food services
Transport and logistics Technology, media and telecommunications Financial and professional services
Other public and personal services
80%
70%
60%
Share of jobs at risk
50%
40%
30%
20%
10%
0%
North America Northern Europe Southern Europe China Developed Asia Latin America

12
Ratio of machine working hours 2018 to 2022, by task
Ratio of machine working hours by task 2018-2022
2018 2022
70%
62%
60%
55%
50% 47%
46% 46%
44% 44%
Share of working hours
40%
36%
34%
31% 31%
28% 29% 28% 29%
30%
23%
19% 19%
20%
10%
0%
Reasoning and Coordinating, Communicating and Administering Performing physical Identifying and Performing complex Looking for and Information and data
decision making developing, interacting and manual work evaluating job-releant and technical receiving job-related processing
managing and activities information activities information
advising
Note: Worldwide; November 2017 to July 2018; 313 Respondents; companies

Source(s): World Economic Forum
13
Change of hours worked in 2030 compared to 2016 in the United States and Western Europe,
by skill level
Change in amount of hours worked by skill set in 2030 compared to 2016
Western Europe United States
Percentage change in working hours

-30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% Automation is considered to be the
main driving change factor for the job
-16% market of the future, as the adoption of
Physical and manual skills automation and artificial intelligence will
-11%
transform the entire workplace.
There are strong growth opportunities
-17%
Basic cognitive skills
for technological skills such as basic
-14% digital skills and advanced IT skills and
programming. Basic cognitive and
physical skills (e.g. inspecting &
7%
Higher cognitive skills monitoring skills; basic data input and
9% processing skills) on the other hand are
projected to decline.
22% The transportation and logistics industry
Social and emotional skills is projected to be impacted the most in
26% terms of workforce change.
52%
Technological skills
60%
Note: Austria, Denmark, Finland, Germany, Greece, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom, United States; 2018
Source(s): ILO; McKinsey
14
02 Leading Countries
▪ Experts, papers, patents
▪ Funding & companies

United States and China leading the way in artificial
intelligence
Both China and the United States are ranked as the top countries for artificial intelligence in all „By 2020 they will have
the major categories we looked at (number of companies and experts, funding, patent caught up. By 2025 they
applications and papers published on artificial intelligence). Historically, the majority of funding will be better than us. And
has been invested in the United States. However, China is making a strong push for the global by 2030 they will dominate
lead. In 2017, almost 28 billion U.S. dollars were poured into the Chinese artificial intelligence the industries of AI. Just
market. stop for a sec. The Chinese
One main difference between the United States and China is the role of the government. China’s government said that.“
government has outlined its artificial intelligence plans in a national strategy and is streamlining
the development more strongly than the United States. For example, four out of five artificial Eric Schmidt – Former
intelligence startups with funding of more than one billion U.S. dollars are located in China. Google CEO & Executive
However, the number of startups venturing into this field is around 3.5 times higher in the United Chairman of Alphabet
States than China.
This shows that the United States are the more innovative country for artificial intelligence, while
China is more concentrated in larger artificial intelligence companies.
Other countries where investment and development of artificial intelligence is at a significant
level are Canada, Japan, Israel, India and the three biggest economies in Europe – Germany,
the UK and France. French president Emmanuel Macron, for example, announced government
investments of more than 1.5 billion U.S. dollars for his country in March 2018.
16
17
Artificial intelligence performance benchmark by country as of 2018
AI country performance benchmark 2018
Personnel Monetary Impact Competitiveness Research & Education Technology
Benchmark score
0 50 100 150 200 250 300 350
United States 36 68 59 76 98
Germany 31 56 57 52 70
United Kingdom 48 69 56 32 29
China 11 34 26 66 95
France 37 52 46 22 45
Japan 10 12 53 18 87
Republic of Korea 10 23 51 22 71
Canada 28 35 56 14 28
Netherlands 13 40 63 20 19
Australia 14 18 46 18 37
Poland 12 30 29 10 16
Russian Federation 10 18 19 16 29
Note: Worldwide, Australia, Canada, China, France, Germany, Japan, South Korea, Netherlands, Russia, United Kingdom, United States; 2018
Source(s): Capgemini
18
Number of artificial intelligence companies worldwide as of June 2018, by country
Number of AI companies worldwide 2018, by country
Number of companies
0 500 1,000 1,500 2,000 2,500 As of June 2018, there were 4,925
United States 2,028
artificial intelligence enterprises
worldwide. The establishment of new
China 1,011 artificial intelligence companies has
United Kingdom 392 slowed worldwide since 2015 when the
number of newly established enterprises
Canada 285
worldwide reached 847.
India 152
Israel 121
France 120
Germany 111
Sweden 55
Spain 53
Netherlands 40
Japan 40
Switzerland 40
Poland 33
Australia 31
Note: Worldwide; as of June 2018

Source(s): CISTP
19
Number of artificial intelligence startups worldwide in 2018, by country
Number of AI startups by country 2018
Number of startups
0 200 400 600 800 1,000 1,200 1,400 1,600 Total number of true artificial intelligence
United States 1,393
startups worldwide is 3,465.
China 383
The number of startups exceed the
number of total AI enterprises for some
Israel 362 countries – indicating that the AI
United Kingdom 245 ecosystem of some countries (e.g.
Israel) might have been growing more
Canada 131
dynamically than others over the past
Japan 113 year.
France 109
Germany 106
India 82
Sweden 55
Finland 45
South Korea 42
Spain 39
Singapore 35
Switzerland 28

Source(s): Roland Berger
20
US leads world in artificial intelligence talent – both in quantity & quality
Number of artificial intelligence (AI) experts/talents worldwide by country 2018
AI talent Top AI talent
Number of experts/talents
Estimates on the number of global AI professionals/experts/talents
0 5,000 10,000 15,000 20,000 25,000 30,000 range from 200 thousand to 1.9 million worldwide.
United States The United States lead all countries with 14 percent of global AI
talent and around 44 percent of AI professionals.
China
The AI talent pool of the United States, Europe, Japan and Australia
India
is more advanced in terms of expertise, skill level and experience
Germany compared to China and India.
United Kingdom While 18 percent of US AI talent is considered top-level, this is true
France
for only around 5 to 6 percent of AI talent in China. In the US, the
share of top-level talent is 25 percent, up from 14 percent share of
Iran** total talent, whereas China’s share of top-level talent is only 5
Brazil percent compared to a 9 percent share of overall global AI talent.
Spain Around 70 percent of AI professionals in the US have more than ten
years of experience compared to almost 40 percent in China.
Italy
Canada
Turkey**
Australia
Japan

Source(s): Institute for Science and Technology Policy (China) (Tsinghua University)
21
Number of artificial intelligence professionals by country in 2017 (in 1,000s)
AI professionals by country worldwide 2017
Number of AI professionals in thousands Linkedin estimated the number of AI

0 100 200 300 400 500 600 700 800 900 professionals at around 1.9 million in
United States 850
2017, based on entries in their database
and desk research.
India 150
Compared to the more narrow definition
United Kingdom 140
used for „AI talents“, the lead of the
Canada 80 United States for AI workforce is even
France 50 more substantial at a 40 percent share
Australia 50 China ranks only in seventh place for
China 50 number of AI professionals. The data
might not show the full picture though, as
Germany 30
Linkedin does not have the same
Netherlands 30 penetration in all of the markets shown in
Italy 30 the graph.
Spain 20
Brazil 20
Singapore 17
United Arab Emirates 16
South Africa 15

Source(s): LinkedIn
22
Number of artificial intelligence patents granted by trademark/patent office worldwide from
2000 to 2016
Artificial intelligence patents granted by patent/trademark office 2000-2016
Biological Knowledge Mathematical Other
Number of patents granted

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
USPTO (United States)
SIPO (China)
PCT (International)
JPO (Japan)
EPO (Europe)
Note: Worldwide; 2000 to 2016

Source(s): RIETI
23
Number of artificial intelligence patents granted to universities by country from 2000 to 2016
Artificial intelligence patents granted to universities 2000-2016

0 100 200 300 400 500 600 700 800
Chinese university 725
U.S. university 241
Japanese university 93
ROW universities 118
Note: Worldwide, China, Japan, United States; 2000 to 2016

Source(s): RIETI
24
Number of papers published in the field of artificial intelligence worldwide from 1997 to 2017,
by country
AI-related paper publications worldwide 1997-2017, by country
Number of publications
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000
United States 369,588
China 327,034
United Kingdom 96,536
Japan 94,112
Germany 85,587
India 75,128
France 72,261
Canada 61,782
Italy 61,466
Spain 58,582
Republic of Korea 52,175
Taiwan, China 46,138
Australia 45,884
Iran 34,028
Brazil 27,552

Source(s): CISTP
25
Number of papers published in the field of artificial intelligence in China and worldwide from
1997 to 2017 (in 1,000s)
AI-related paper publications in China and worldwide 1997-2017
Global China
160
146
140 135.5 134.5
120
120
Number of publications in thousands
106
102 99.5
100 93.5
89.5 89.5
83.5 86
80
72
61
60 54.5
49.5
37.5 39 36.5
40 33 35
29.5 30
24.5 27 26.5 26
23.5 22 22 21
19 17.5
20
12.5
7.5 9
4 6
2
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source(s): Statista estimates; CISTP
26
United States – Still in the artificial intelligence driver’s seat?
Projected increase of GDP due to artificial intelligence by industry sector in North America in 2030
Productivity Consumption
GDP increase
0% 5% 10% 15% 20% 25% AI policy/strategy
Trump administration
Health, education and other public and personal services 10% 11.5% New Select Committee on AI to advise White
House in 2018.
Main government goals to maintain global
leadership in AI:
Consumer goods, accomodation and food services 7% 9%
• Support national AI R&D ecosystem (e.g.
public-private partnerships)
• Develop US workforce to benefit from AI
Technology, media and telecommunications 6.5% 7% • Remove barriers to innovation (regulations)
Obama administration
Three separate reports released in 2016 outlining
Financial and professional services 4.5% 5.5% a possible foundation for future US strategy:
• Preparing for the Future of Artificial
Intelligence: Recommendations regarding
Manufacturing and construction 4% 5% regulations, public R&D, automation, fairness,
ethics and security
• National Artificial Intelligence Research and
Development Strategic Plan: Outline for
Energy, utilities and mining 5% 4% publicly funded AI R&D strategy
• Artificial Intelligence, Automation, and the
Economy: Deals with impact of automation,
Transport and logistics 3% 5% possible policies to increase benefit from AI
and mitigate costs
Note: North America; 2018

27
Artificial intelligence funding investment in the United States from 2012 to 2018 (in million U.S.
dollars)
Artificial Intelligence funding United States 2012-2018
6,000
Funding and investment in artificial
intelligence in the United States has
consistently risen over the years.
5,012
5,000 Data for the first two quarters of 2018 point
towards a new record high in AI funding for
4,218 the whole year in the United States, as AI
funding for Q1 and Q2 2018 alone already
3,921
Funding in million U.S. dollars
4,000 amounted to around 85 percent of overall

funding for the full year of 2017.
3,203 Funding across all industries in the United
3,000 States was 27.5 billion USD in Q3 2018,
an increase of about 15 percent from Q2
2,489
2018. AI funding is expected to grow at
least in line with overall funding as well.
2,000 For 2018, overall AI funding in the United
States is forecast to amount to between
nine and ten billion USD based on overall
1,118
funding growth and growth rates of AI
1,000 funding over the past eight quarters.
595
282
0
2011 2012 2013 2014 2015 2016 2017 Q1 & Q2 2018
Note: United States; 2012 to 2018

Source(s): CB Insights; PwC
28
China on its way to global artificial intelligence dominance
In July 2017, the State Council of China released the Next Generation Artificial Intelligence Development Plan outlining the country’s
strategic approach and policy for AI up to 2030:
• 2020: Keeping pace with developments in artificial intelligence and narrow/close the gap to the United States; China as a global
innovation leader. Focus on big data intelligence, autonomous intelligence systems (estimated core AI industry size 150 billion
yuan / roughly 21.5 billion USD)
• 2025: Make major breakthroughs in basic AI technologies; initial AI laws and regulations; broader use of AI across all sectors –
medicine, city infrastructure, manufacturing, agriculture (estimated core AI industry size 400 billion yuan / roughly 58 billion USD)
• 2030: World leader in AI; major breakthroughs in core technologies. Focus in social governance, national defense construction,
industrial value chain (estimated core industry size 1,000 billion yuan / roughly 144 billion USD)
• Baidu, Alibaba, Tencent and iFlytek appointed by Chinese government as “national champions” to lead development and
innovation of AI
• The state-owned electric utility monopoly State Grid Corporation of China holds by far the most AI patents in the country with
4,246. Baidu has the most amongst enterprises with 542 and the Chinese Academy of Sciences System the most in the
academic world with 897 patents
• 2.1 billion USD investment in a technology park dedicated to artificial intelligence to be built in Beijing
• Government funding of around 430 million USD for AI-related research projects in a six month period in early 2018 alone
29
Government funding of artificial intelligence related projects in China in the six month period
ending April 2018, by focus (in million U.S. dollars)
Artificial intelligence related project funding in China six months ending April 2018
Funding in million U.S. dollars

0 20 40 60 80 100 120 140
Smart cars 128.7
Cloud and big data 74.6
Smart robotics 72
Quantum and high performance computing 57.3
Strategic technologies 55.2
Leading electronic materials 27.2
Smart medical devices 13.9
Note: China; 2015 to 2018

Source(s): SCMP; Various sources (National Science and Technology Information System)
30
Size of the artificial intelligence market in China from 2015 to 2020 (in billion U.S. dollars)
Artificial intelligence market size in China 2015-2020
16
Considering the goal of the Chinese
14.3 government to make the country the
global leader in AI by 2030, the market is
14
projected to grow strongly over the next
few years. The GDP in China is forecast
12 to increase by at least ten percent
across all industries and sectors.
10.2
10
6.2
6
4 3.4
2.1
2 1.6
0
2015 2016 2017 2018 2019 2020
Note: China; 2015 to 2018.

Source(s): CMN; CISTP; Statista estimates
31
Projected increase of GDP due to artificial intelligence by industry sector in China in 2030
Impact of artificial intelligence on GDP in China as share of GDP 2030
Productivity Consumption
GDP increase
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Health, education and other public and personal services 23% 22.5%
Consumer goods, accomodation and food services 14.5% 14%
Technology, media and telecommunications 13.5% 12.5%
Financial and professional services 14% 11.5%
Manufacturing and construction 12% 11.5%
Energy, utilities and mining 11% 10.5%
Transport and logistics 8.5% 8.5%
Note: China; 2018

32
Number of newly founded artificial intelligence companies in China from 2000 to 2017
Number of AI start-ups in China 2000-2017
250
The average age of artificial intelligence
228 enterprises in China is 5.5 years.
75 percent of AI companies in China are
located in Beijing, Shanghai and
200 192
Guangdong.
Number of companies
150
128
98
100
62
57
50
30 30
20
15 15 15 15
10 10 10 10 10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Note: China; 2000 to 2017

Source(s): CAICT; Statista estimates; CISTP
33
Highest valued artificial intelligence companies in China in 2018 (in billion U.S. dollars)
Artificial intelligence unicorn companies in China by value 2018
Estimated worth in billion U.S. dollars

0 2 4 6 8 10 12 14 16
DJI 15
UBTech 5
SenseTime 4.5
Cambrion 2.5
Cloudwalk 2
YITU 2
Face++ 2
Horizon Robotics 1.5
iCarbonX 1
Pony.ai 1
Unisound 1
Tongdun 1
Mobvoi 1
Orbbec 1
Note: China; 2018

Source(s): CMN
34
03 Investment & Funding
▪ Venture capital & funding
▪ Major deals
Investment in AI is at an all-time high
Artificial intelligence has, once again, entered an exciting period - with hopes for breakthrough “AI is the new electricity. I
developments and products. We are in what has been termed an “AI spring”, as investments can hardly imagine an
and funding into artificial intelligence have grown strongly over the past few years. For example, industry which is not going
the growth in global funding of AI startups amounted to more than 460 percent from 2012 to to be transformed by AI. A
2017. Furthermore, the overall artificial intelligence market is forecast to grow annually by more clear path to an AI-powered
than 100 percent each year up to 2025. society includes wide
In 2017, AI investment and financing reached almost 40 billion U.S. dollars globally - up from adoption of AI to drive
around 31 billion U.S. dollars the year before. Almost 70 percent of investments went to China, industrial and technological
as the country is making a strong push to reach its goal of becoming the world‘s leader in AI. endeavors.”
Globally, the majority of investment and funding goes into all purpose AI companies that are not Andrew Ng – Co-Chairman
focused on a specific industry or product. Startups are a huge part of the artificial intelligence & Co-Founder of Coursera;
ecosystem, as funding of AI startups amounted to more than 15 billion U.S. dollars in 2017. Former Chief Scientist at
Trends show that an increasing number of startups are moving to more mature funding phases. Baidu
Only around a quarter of investment and funding projects in the first quarter of 2018 were in the
seed/angel phase compared to more than 40 percent in the previous year. Full year data for
2018 will highlight if this trend solidifies itself.
36
Growth of the artificial intelligence market worldwide from 2017 to 2025
Artificial intelligence market growth worldwide 2017-2025
160% 154%
150% 152% 151%
146%
143%
140%
140% 133%
127%
120%
Year-on-year growth
100%
80%
60%
40%
20%
0%
2017 2018 2019 2020 2021 2022 2023 2024 2025

Source(s): Tractica
37
Global artificial intelligence investment and financing from 2013 to Q1 2018 (in billion U.S.
dollars)
AI investment and financing worldwide 2013-2018
45
Available data for the first quarter of
2018 points towards AI investments
40 39.2 leveling off at 2017 values. Global AI
investments in the first quarter of 2018
were at about a quarter of total 2017
35
spending.
31.3
AI startup funding is also on pace to
30
Funding in billion U.S. dollars
28 match, but not strongly exceed, 2017

levels.
25
20
15 13.2
10.1
10
4.5
5
0
2013 2014 2015 2016 2017 Q1 2018
Note: Worldwide; 2013 to Q1 2018

Source(s): CAICT; Statista estimates
38
Artificial intelligence startup funding worldwide from 2011 to 2018 (in billion U.S. dollars)
AI funding worldwide 2011-2018, by quarter
Q1 Q2 Q3 Q4
16
14
12
10
0
2011 2012 2013 2014 2015 2016 2017 2018
Note: Worldwide; 2011 to Q3 2018.

Source(s): Venture Scanner; Statista estimates
39
Share of global artificial intelligence investment and financing projects from 2013 to Q1 2018,
by stage of funding
Distribution of AI investment and financing projects 2013-2018, by stage of funding
Seed/Angel Series A Series B Series C Series D Series E Series F Other series
100%
90%
80%
70%
60%
Share of projects
50%
40%
30%
20%
10%
0%
2013 2014 2015 2016 2017 Q1 2018

40
Share of artificial intelligence startup funding count (deals) worldwide from 2012 to 2017, by
stage of funding
AI funding count share worldwide 2012-2017, by stage of funding
Seed A B C D Late stage
100%
90%
80%
70%
Share of funding count
60%
50%
40%
30%
20%
10%
0%
2012 2013 2014 2015 2016 2017

41
Share of artificial intelligence funding amounts worldwide from 2012 to 2017, by stage of
funding
AI funding amount share worldwide 2012-2017, by stage of funding
Seed A B C D Late stage
100.0% 2.5%
4% 6.5% 9.5% 13.5%
7%
15.5% 20.5%
2.5% 29.5%
90.0%
18% 8%
21%
80.0% 20.5%
26%
25%
70.0% 31.5%
Share of funding amounts
28.5%
60.0% 31.5%
23.5%
40%
50.0% 29.5%
40.0%
28.5%
27.5%
29.5%
30.0% 22%
20.0% 19%
15%
10.0% 12.5%
11% 11.5%
8%
3.5%
0.0%
2012 2013 2014 2015 2016 2017

42
Number of newly founded artificial intelligence companies worldwide from 2000 to 2017
Number of AI start-ups worldwide 2000-2017
900
845
800
740
700
650
600
Number of companies
500
450
400 385
320
300
245
200 180
130
100
100 85
60 65
45 50
35 35 30
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 July 2018

43
Number of artificial intelligence startup company acquisitions worldwide 2013-2017
Acquisitions of AI startup companies worldwide 2013-2017
140 The growth of investment in AI over the

past few years has led to more
acquisitions of startups as well.
120 115 Intel is one of the most active investors
in AI with more than one billion USD
invested in AI startups through its Intel
100 Capital division.
Number of acquisitions
80
80
60
45
39
40
22
20
0
2013 2014 2015 2016 2017

Source(s): CB Insights
44
Number of artificial intelligence investments by investor as of November 2018
Number of AI investments by investor as of November 2018
Number of investments
0 5 10 15 20 25 30 35 40 45 50
Intel Capital 50
500 Startups 45
NEA 34
Battery Ventures 29
Y Combinator 28
Madrona Venture Group 25
Horizon Ventures 22
Accel 22
Bloomberg Beta 22
Data Collective 21
Techstars 21
First Round Capital 21
Sequoia Capital 21
Kima Ventures 21
vesna 20
Note: Worldwide; as of November 2018

Source(s): Website (index.co)
45
Artificial intelligence funding worldwide cumulative through September 2018 (in billion U.S.
dollars), by category
AI funding worldwide cumulative through September 2018, by category

0 2 4 6 8 10 12 14 16 18 20
Machine learning applications 19.5
Machine learning platforms 9.4
Computer vision platforms 6.5
Smart robots 5.4
Recommendation engines 4
NLP 3.1
Computer vision applications 3
Virtual assistants 2.5
Speech recognition 2
Gesture control 0.8
Video recognition 0.4
Note: Worldwide; Cumulative through September 2018

46
Share of global artificial intelligence investment and financing projects from 2013 to Q1 2018,
by category
Distribution of AI investment and financing projects worldwide 2013-2018, by category
Share of total number

0% 10% 20% 30% 40% 50%
AI+ 53%
Computer Vision 11%
Big Data & Data Services 10%
Smart Robot 8%
Natural Language Processing 6%
Autonomous Vehicles 4%
Speech 4%
Basic Hardware 3%
Unmanned Aerial Vehicle 2%
Augmented & Virtual Reality 1%

Source(s): CAICT
47
04 Leading Companies
▪ Investments
▪ Patents & papers

US companies heavy hitters in AI with China catching up
Artificial intelligence is not limited in its possibilities of use, meaning companies from all spheres “If the internet was the
are engaged in the market. Naturally, major players from the tech industry are leading the way; appetizer, then AI is the
having already invested billions of dollars into research, development and the artificial main course. The internet
intelligence ecosystem overall. Amongst these are well-known US-based internet and tech giants changed a lot of our daily
like Google, Amazon, Facebook, Apple, Intel, IBM and Microsoft. lives, but did not have
Google is at the forefront of AI investment and development. Over the past two decades the much impact on the 2B
company has invested billions of dollars in AI R&D and the acquisition of startups in the industry. industries. I think AI will
Most notably they acquired Deepmind, which Google bought for 500 million U.S. dollars in 2014. change that.”
Using AI patents and published papers on AI topics as an indicator for innovation and “AI
readiness” of companies Microsoft, IBM and Samsung consistently show up in the Top-5 of such Robin Li Yanhong – CEO
rankings. of Baidu
Chinese companies like Tencent, Baidu and Alibaba are rapidly closing in on the leading US-
based tech giants though as some of the best-funded AI startups are also located in China.
Toutiao, Bytedance, SenseTime and NIO have each raised more than 2.5 billion U.S. dollars in
funding. Today there are more than ten unicorn AI companies in China with a value of one billion
U.S. dollars or more each. The state-owned electricity utility company State Grid Corporation of
China also has a strong presence in the market as it leads all companies in China in terms of
patents and paper publications.
49
Artificial intelligence startup acquisitions spending of tech companies from 1998 to 2017 (in
million U.S. dollars)
Technology companies by AI startup acquisitions spending 1998-2017
Acquisition spending in billion U.S. dollars

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Some of the major tech companies are
using a two-part approach to AI by
Google 3,900 investing into their own AI research and
development departments but also
Amazon 871 investing in and acquiring startups from
the AI ecosystem.
Apple 786 The acquisition of AI startups provides
the companies with potential products
Intel 776 and use cases. However, more
importantly they are able to acquire AI
Microsoft 690 professionals and experts which are in
high demand all over the world.
Uber 680
Twitter 629
AOL 191.7
Facebook 60
Salesforce 32.8
Note: Worldwide; January 2018

Source(s): Website (techrepublic.com)
50
Number of artificial intelligence startups acquired from 2010 to June 2018, by company
AI startup acquisitions by company 2010-2018
Number of acqusitions
0 2 4 6 8 10 12 14
Alphabet/Google 14
Apple 13
Facebook 6
Amazon 5
Intel 5
Microsoft 5
Meltwater 5
Twitter 4
Salesforce 4
Note: Worldwide; 2010 to June 2018

Source(s): Fortune; CB Insights
51
Artificial intelligence patent applications of leading technology companies from 1999 to 2017
Global AI-related patent applications by company 1999-2017
AI patent applications
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500
Some of the major players in the tech
industry are leading the charge in AI
Microsoft 4,167
foundation work and innovation, as
companies like IBM, Microsoft, Google and
IBM 3,360 Samsung have applied for the most
patents and published the majority of
Google 2,650 papers on AI topics over the past 10 to 20
years.
Samsung 2,404
Quantity in AI papers and patents are
indicative of these companies being in the
AT&T 1,413 lead today but this does not necessarily
mean that they are the ones to cash in first
Baidu 1,246 or that they will be at the forefront in five
years, as more money than ever is
State Grid 1,167 invested in AI research especially in China.
Toshiba 1,149
Fujitsu 1,132
NEC 930

52
Number of published artificial intelligence patents in DWPI database by company worldwide
from 1997 to 2017
AI patents published in DWPI database worldwide 1997-2017, by company
Number of patents
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000
IBM 7,276
Microsoft 5,356
Samsung Electronics 5,255
State Grid Corporation of China 3,794
Canon 3,569
Sony 3,090
NEC Corporation 2,932
Fujitsu Limited 2,868
Google 2,757
Mitsubishi Electric 2,716

Source(s): CISTP
53
Number of artificial intelligence patents granted by company worldwide from 2000 to 2016
Artificial intelligence patents granted by company 2000-2016

0 200 400 600 800 1,000 1,200
IBM (US) 1,057
Microsoft (US) 466
Qualcomm (US) 450
NEC (Japan) 255
Sony (Japan) 212
Google (US) 195
Siemens (Germany) 192
Fujitsu (Japan) 154
Samsung (Korea) 119
NTT (Japan) 94
Hewlett- Packard (US) 93
Yahoo (US) 88
Toshiba (Japan) 86
D-wave (Canada) 77
Hitachi (Japan) 69

Source(s): RIETI
54
Number of papers published in the field of artificial intelligence worldwide from 1997 to 2017,
by company
AI-related paper publications worldwide 1997-2017, by enterprise
0 1,000 2,000 3,000 4,000 5,000 6,000
IBM 5,105
Microsoft 4,710
Siemens AG 2,825
Samsung 1,548
Google 1,383
Intel 1,324
Philips 1,229
Microsof Research Asia 1,181
General Electric 1,168
Siemens 1,136
NEC Corporation 957
Philips Research 923
Nokia 869
State Grid Corporation of China 841
Honda 816

Source(s): CISTP
55
Artificial intelligence startups ranked by total equity funding as of November 2018 (in million
U.S. dollars)
Ranking of most well-funded AI startup companies worldwide as of November 2018
Total funding in million U.S. dollars

0 500 1,000 1,500 2,000 2,500 3,000 3,500
Some of the best funded companies in
Toutiao (China), 2012 3,100 artificial intelligence today are located in
ByteDance (China), 2012 3,000 China.
SenseTime (China), 2014 2,600 With a high number of AI companies and

enterprises in the United States, funding
NIO (China), 2014 2,500
and investment money is more spread out
Argo AI (United States), 2017 1,000 when compared to China. The majority of
AI funding in China is more concentrated
Dataminr (United States), 2009 968.6
with fewer but bigger companies,
UBTech Robotics (China), 2012 940 indicative of a more concentrated market
Zoox (United States), 2014 790
space.
Tanium (United States), 2007 782.8
Affirm (United States), 2012 720
Indigo (United States), 2014 609
Megvii Technology (China), 2011 607
OakNorth (United Kingdom), 2013 601
CloudWalk Technology (China), 2015 546
Kreditech (Germany), 2012 497.3
Note: Worldwide; as of November 2018

Source(s): CB Insights; Statista; CrunchBase; various sources
56
Highest valued artificial intelligence companies in China in 2018 (in billion U.S. dollars)
Artificial intelligence unicorn companies in China 2018, by value
Estimated worth in billion U.S. dollars

0 2 4 6 8 10 12 14 16
DJI 15
UBTech 5
SenseTime 4.5
Cambrion 2.5
Cloudwalk 2
YITU 2
Face++ 2
Horizon Robotics 1.5
iCarbonX 1
Pony.ai 1
Unisound 1
Tongdun 1
Mobvoi 1
Orbbec 1
Note: China; 2018

Source(s): CMN
57
05 AI Technologies & Enablers
▪ AI types & categories
▪ AI frameworks
▪ Computing & semiconductors

Artificial intelligence technologies – a wide field of
opportunites & categories
Artificial intelligence mainly functions as an umbrella term for different technologies and concepts. One subset of AI that has been one
of the main focus areas of AI research and investment over the past ten years is machine learning.
Pattern recognition – a subfield of machine learning, natural language processing, learning systems, and neural networks, to name a
few, have attracted tenth of billions in funding money over the past ten years. Further development of AI not only hinges on
investments and research in the field itself but also on various adjacent hardware, software and service technologies.
Deep learning artificial intelligence systems, for example, need huge amounts of data and sufficient computing power to improve
through reinforcement learning. In 2016, Google Deepmind‘s AlphaGo used 1,202 CPUs and 176 GPUs in computing power when it
beat world champion Lee Sedol in the Chinese board game of Go.
Example systems and products:
• Availability of / access to large sets of data for AI systems to learn from (big data)
• Semiconductors / computer chips (CPU, GPU, VPU, SPU & AI chips) & sensors
• Computing power & AI frameworks (environments)
• 5G mobile network (low latency in autonomous driving)
59
External investment in artificial intelligence-focused companies worldwide in 2016, by
technology category (in billion U.S. dollars)
External investment in AI-focused companies worldwide 2016, by category
High end Low end
External investment in billion U.S. dollars What actually is…?

0 1 2 3 4 5 6 7 8
Computer vision is an interdisciplinary
7 field of computer science dealing with
Machine learning
5 enabling computers to see, identify and
process images. It aims at giving
3.5 computers a high level of
Computer vision
2.5 understanding of these images similar
to humans.
0.9
Natural language Natural language processing (NLP)
0.6
is a subfield of AI that helps computers
understand, interpret and manipulate
0.5
Autonomous vehicles human language. It combines
0.3 linguistics with computer science to
identify and understand spoken
0.5 language as well as text based
Smart robotics
0.3 language.
0.2
Virtual agents
0.1

Source(s): McKinsey; PitchBook; Dealogic; S&P Capital IQ
60
Number of artificial intelligence publications worldwide from 2007 to 2017, by topic
AI-related publications worldwide 2007-2017, by topic
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 What actually is…?
Pattern recognition 63,666
Pattern recognition is a branch of machine
Learning systems 53,539
learning (supervised/unsupervised) that is
Machine learning 29,941 used to recognize patterns and regularities
in data sets. It makes use of computer
Neural networks 26,470
algorithms to discover these regularities and
Natural language processing systems 23,486 then classifies the data into different
Learning algorithms 22,626
categories. Pattern recognition is the basis
for computer-aided diagnosis systems in
Data mining 20,089 medical science. Other applications include
Feature extraction 19,709 speech recognition, image recognition and
classification of text into categories.
Semantics 18,529
Image processing 16,649 Artificial neural networks (ANN) is an AI

technique that mimics or tries to replicate
Pattern recognition, automated 15,848
the workings of the human brain. It is one of
Pattern recognition, visual 14,629 the main concepts/frameworks used for
Non-human 13,855
machine and deep learning. Developed
neural networks can extract meaning from
Decision support systems 13,580 complicated data and detect trends and
Decision making 13,430 patterns too complex for humans to identify.

Source(s): IP Pragmatics
61
Share of global artificial intelligence enterprises in 2018, by category
Distribution of AI enterprises worldwide 2018, by category
Share of total number

0% 10% 20% 30% 40% 50% 60%
Artificial intelligence companies are
AI+ - specific industry verticals 49% almost evenly split amongst ones that
focus on one specific industry vertical,
Big Data & Data Services 12%
such as business intelligence and
healthcare, and those that are focused
on a specific type of horizontal AI
Computer Vision 11%
application.
Smart Robot 8%
Natural Language Processing 7%
Basic Hardware 5%
Speech 4%
Autonomous Vehicles 3%
Unmanned Aerial Vehicle 1%
Augmented & Virtual Reality 1%

Source(s): CAICT
62
Artificial intelligence hardware market share worldwide in 2017, 2020 and 2023, by product
AI hardware market share by product worldwide 2017-2023
Sound processor Embedded sound processing unit Vision processor Embedded vision processing unit
100%
96% 43% 38%
90%
80%
70%
60% 15%
Market share
7%
50%
4%
46% 6%
40%
41%
30%
20%
10%
4%
0%
2017 2020 2023

Source(s): Yole Développement
63
Semiconductor sales revenue worldwide from 1987 to 2019 (in billion U.S. dollars)
Semiconductor industry sales worldwide 1987-2019
500
450
400
350
Sales in billion U.S. Dollars
300
250
200
150
100
50
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source(s): WSTS; SIA
64
Semiconductor unit shipments worldwide from 2000 to 2018 (in billions)
Semiconductor unit shipments worldwide 2000-2018
1,200
1,075.1
986.2
1,000
868.8
815.3
800
Unit shipments in billions
705.6
623.7
600 556.2
467.1
397.4
400
200
0
2000 2004 2006 2007 2010 2014 2016 2017 2018

Source(s): IC Insights
65
Estimated size of the artificial intelligence semiconductor market in the United States from
2017 to 2022 (in billion U.S. dollars)
AI semiconductor industry revenue in the U.S. 2017-2022
35 The global market for AI specific chips is forecast to increase from

33
4.52 billion USD in 2017 to more than 90 billion USD by 2025. Major
semiconductor manufacturers as well as a variety of startups are
30 currently developing chips specifically for AI purposes.
CPUs (Central Processing Unit) are chips used for general
26
computing purposes.
25
GPUs (Graphic Processing Unit) are programmable chip
Revenue in billion U.S. dollars
processors originally designed for display functions (images, videos,

animations). They have been adopted for use in AI as they can
20 19 perform parallel operations on multiple sets of data.
FPGA (Field Programmable Gate Arrays) is a semiconductor chip
that can be configured and programmed by the user. FPGAs are
15
good at processing small-scale but intensive data.
12
ASIC (Application-Specific Integrated Circuit) chips are built for a
10 specific purpose or application. They are tailored towards that one
specific use but cannot be customized after production.
6 NPU (Neuromorphic Processing Unit) are a type of newly
5 developed chip category mimicking the architecture of the human
3 brain. These type of chips are still in the early stages of
development.
0
2017 2018 2019 2020 2021 2022
Note: United States; 2016 to 2018

Source(s): SIA
66
Optoelectronics / optical semiconductor revenue worldwide from 2008 to 2019 (in billion U.S.
dollars)
Global optical semiconductors market revenue 2008-2019
40
38.02
35.99
34.81
35
33.26
31.99
29.87
30
27.57
26.2
Sales in billon U.S. dollars
25
23.09
21.7
20
17.9
17.04
15
10
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source(s): WSTS
67
CMOS image sensors sales revenue worldwide from 2007 to 2022 (in billion U.S. dollars)
CMOS image sensor sales worldwide 2007-2022
20 CMOS image sensors are projected to become one of the most

19
important means to acquire image data for artificial intelligence
18 17.4 applications. They could be considered the eye of artificial
intelligence bringing vision to these systems.
16.1
16 15.2 Today there are two main technologies in use for CMOS image
sensors:
13.7
Sales revenue in billion U.S. dollars
14 FSI (front side illuminated) – limited in the fields of use compared

12.5 to BSI because the pixel size is reduced with higher resolutions.
12 The manufacturing process of FSI sensors is more simple, lower in
10.5 cost and has a higher yield compared to BSI.
9.9
10 BSI (back side illuminated) – more mature/advanced technology
8.9
than FSI. Solution for applications in need of high resolution with
8 7.4 limited optical and pixel size. BSI sensors have a high sensitivity
7.1
and a strong low-light performance. Exemplary fields of application
5.9 are surveillance, factory automation and smartphones.
6
4.5 4.5
4 3.9
4
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Source(s): IC Insights; Statista estimates
68
Worldwide revenue of the supercomputer market from 2015 to 2017 (in billion U.S. dollars)
Supercomputer revenue worldwide 2015-2017
5 4.8
4.5
4.1
4
3.5 3.3
2.5
1.5
0.5
0
2015 2016 2017

Source(s): Hyperion Research
69
Deep learning artificial intelligence framework power scores 2018
Ranking of artificial intelligence deep learning frameworks 2018
Power score
0 10 20 30 40 50 60 70 80 90 100
Deep learning uses neural networks and
TensorFlow 96.77 large data sets (big data). The concept is
in many aspects inspired by the human
Keras 51.55 brain. Based on existing information and
the neural network, the system is capable
PyTorch 22.72 of connecting what it has already learned
with new content and information to
Caffe 17.15 continuously learn more. As a result, the
system has the ability to make predictions
Theano 12.02 and decisions.
Software frameworks are platforms for
MXNET 8.37
developing software applications. They
CNTK
provide generic functionalities that can be
4.89
selectively changed by additional user-
DeepLearning4J 3.65
written code.
Caffe2 2.71
Chainer 1.18
FastAI 1.06

Source(s): Website (Towards Data Science)
70
Artificial Intelligence frameworks by number of commits and contributors on GitHub as of
November 2018
Popularity/usage of artificial intelligence frameworks worldwide 2018
Commits Contributors
Number of commits/contributors Google’s open source TensorFlow AI

0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
framework/library has become the
43,768 most used and popular one since its
TensorFlow
1,723 initial release in November 2015.
Theano
28,052
330
DeepLearning4J
26,623
237
Chainer
16,675
192
Microsoft Cognitive Toolkit (CNTK)

15,994
189
PyTorch
14,709
838
Apache MXNet
8,846
641
Keras
4,907
748
Caffe
4,152
270
Torch
1,336
132
Note: Worldwide; as of November 16, 2018

Source(s): GitHub
71
Forecast number of mobile 5G subscriptions worldwide from 2019 to 2022 (in millions)
Forecast number of 5G mobile subscriptions worldwide 2019-2022
450
400
400
350
300
Subscriptions in millions
250
200
150
100 84
50
11
0.42
0
2019 2020 2021 2022
Note: Worldwide; December 2017

Source(s): 5G Americas
72
06 Applications & Industry Impact
▪ Major use cases
▪ Industry & sector impact

Where will artificial intelligence impact be felt first?
Artificial intelligence is set to impact every industry and many aspects of everyday life in the future. “Whenever I hear people
There are still many milestones to be reached to achieve full AI maturity and “strong AI“. However, saying AI is going to hurt
some fields such as virtual digital assistants and chatbots are already making an impact. people in the future I think,
Amazon Alexa, Google Assistant, Apple’s Siri and Microsoft Cortana are well-known examples of yeah, technology can generally
virtual digital assistants (VDA) making use of AI technology. These VDAs answer questions, always be used for good and
provide news and weather updates and let the user control other devices in their home. bad and you need to be careful
about how you build it … if
All major automotive manufacturers are now developing self-driving autonomous vehicles and plan you’re arguing against AI then
to release partly, if not fully, automated cars to the market in the mid-2020s. you’re arguing against safer
In e-commerce and retail, artificial intelligence can help companies with warehouse automation, cars that aren’t going to have
identifying target groups for their products and predicting sales more accurately. accidents, and you’re arguing
against being able to better
In healthcare, the use cases for artificial intelligence are manifold as well. Medical imaging, cancer
diagnose people when they’re
detection, diagnostic scans, robot-assisted surgery, health monitoring, drug discovery and virtual
sick.”
nursing assistants.
- Mark Zuckerberg – Facebook
CEO
74
Share of artificial intelligence startups worldwide in 2018, by industry
Share of AI startups by industry 2018
Share of startups
0% 5% 10% 15% 20% 25%
More than 60 percent of AI startups
General/Cross-Sectoral (B2B services) 25% are applying to major functions in
Communication (B2B services) 14% cross-cutting sectors
(communications, marketing, HR,
Sales/Marketing (B2B services) 12%
security, e-commerce, legal, etc.) and
Healthcare/BioTech 9% are therefore considered B2B
services.
Other 7%
Defense/Security (B2B services) 6%
FinTech 6%
Human Resources (B2B services) 3%
Entertainment 3%
Transportation 3%
Education 2%
Travel 1%
Other (B2B services) 1%
Energy 1%
Automotive 1%

Source(s): Roland Berger
75
Cumulative revenue of top 10 use cases/segments of artificial intelligence market worldwide,
between 2016 and 2025 (in million U.S. dollars)
Top 10 artificial intelligence use cases by cumulative revenue worldwide 2016-2025
Market in million U.S. dollars

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000
Machine/vehicular object detection/identification/avoidance
Static image recognition, classification, and tagging
Patient data processing
Algorithmic trading strategy performance improvement
Localization and mapping
Predictive maintenance
Prevention against cybersecurity threats
Converting paperwork into digital data
Intelligent recruitment and HR systems
Medical image analysis

Source(s): Tractica
76
Cognitive/artificial intelligence systems spending worldwide by use case in 2018 (in billion U.S.
dollars)
Artificial intelligence and cognitive system spending by use case 2018
Spending in billion U.S. dollars

0 0.5 1 1.5 2 2.5 3 3.5
With a projected total market size of 24
billion U.S. dollars, spending on all other
use cases combined amounts to 15.8
Automated customer service agents 2.9 billion USD.
Automated threat intelligence and prevention systems 1.9
Sales process recommendation and automation 1.7
Automated preventive maintenance 1.7

Source(s): IDC
77
Projected spending on artificial intelligence by industry group worldwide in 2020 (in billion U.S.
dollars)
Artificial intelligence spending by industry group worldwide 2020
Spending in billion U.S. dollars

0 2 4 6 8 10 12
Financials 11
Public Sector 10
Distribution & Services 9
Manufacturing & Resources 8
Other 9

Source(s): IDC; Website (Finch Capital)
78
Adoption plans for intelligent automation technologies in organizations worldwide as of 2018
Intelligent automation adoption plans in enterprise worldwide 2018
Unsure No plans Piloting right now Moving to production Scaled-up and industrialized
Share of respondents
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Smart Analytics (including predictive and prescriptive analytics) 5% 14% 28% 30% 23%
Computer Vision 5% 23% 25% 28% 19%
Machine Learing (ML) 5% 17% 31% 30% 17%
NLP (extract & interpret, compare & comply, retrieve and recomment) 6% 23% 31% 24% 15%
Artificial Intelligence (AI) (e.g. IBM Watson-type reasoning apps) 4% 16% 36% 28% 15%
Cognitive/smart virtual assistants (chatbots++) 6% 20% 30% 29% 15%
Robotic Process Automation (RPA) 5% 20% 34% 27% 13%
Note: Worldwide; 2018; 590 Respondents; Global 2000 enterprise leaders including 100 C-level executives
Source(s): HfS Research ; KPMG
79
Healthcare – ready for AI today
There are deep-learning based methods in development and trial that will be able to detect Major use cases in healthcare
illness, including cancer, much better than human average performance. Artificial intelligence
• Medical imaging analysis
applications will be used to diagnose scans, e.g. for heart disease and lung cancer.
• Cancer detection
The medical imaging segment of healthcare offers many opportunities for machine and deep • Diagnostic scans
learning applications. Computer vision models can be trained on a large number of medical • Chronic illness prediction
images which are matched with validated patient diagnoses. These systems can then help • Preliminary diagnosis
• Health monitoring
doctors to process a greater amount of patient cases and lower the number of diagnostic • Drug discovery / creation
mistakes. • Robot-assisted surgery
AI can also be put to use in liquid biopsy. Here, cells and bacteria from patients‘ blood can be • Digital consultation
• Virtual nursing assistants
analyzed for (potential) diseases and cancer. This will lead to earlier detection of such diseases
• Medication management
and improve the patients‘ chances to maintain their health or recover more quickly and effectively. • Dosage error reduction
The use of chatbots for remote patient treatment is another field of application for AI in healthcare • Liquid biopsy
and medicine. Virtual nursing assistants and digital consultations have the potential to reduce • Workflow and administrative tasks
unnecessary hospital and physician visits and lessen the burden on medical professionals.
The global health artificial intelligence market is set for strong growth and projected to reach more
than six billion U.S. dollars in value by 2021.
80
Revenue from artificial intelligence systems in healthcare worldwide from 2013 to 2021 (in
million U.S. dollars)
Global healthcare artificial intelligence market revenue 2013-2021
7,000
6,662.2
6,000
5,000
Revenue in million U.S. dollars
4,298.2
4,000
3,000 2,882
2,002.7
2,000
1,438.4
1,065.1
1,000 811.1
633.8
507
0
2013 2014 2015 2016 2017 2018 2019 2020 2021
Note: Worldwide
Source(s): IP Pragmatics; Frost & Sullivan
81
Forecast value of the artificial intelligence healthcare market by application worldwide in 2026
(in billion U.S. dollars)
Global healthcare artificial intelligence market value 2026, by application
Value in billion U.S. dollars

0 5 10 15 20 25 30 35 40
Robot-assisted surgery 40
Virtual nursing assistants 20
Administrative workflow assistance 18
Fraud detection 17
Dosage error reduction 16
Connected machines 14
Clinical trial participant identifier 13
Preliminary diagnosis 5
Automated image diagnosis 3
Cybersecurity 2
Note: Worldwide
Source(s): IP Pragmatics
82
AI in automotive – twofold challenge for the future
The automotive industry is at the beginning of a major transformation process, in large parts due “So there will be a shared
to artificial intelligence. And it is happening in two major ways, both at the same time. For one, the autonomy fleet where you buy
development of autonomous driving and vehicles is fundamentally changing and challenging the your car and you can choose to
business model of automotive manufacturers. And secondly, the production process in automotive use that car exclusively. You can
is undergoing fundamental changes through the use of robotics and automation, both of which are choose to have it used only by
affected and influenced by developments in AI. friends and family… or other
When moving to an autonomous, self-driving eco-space in transportation, revenue will be drivers who are rated five star.
generated from managing vehicle fleets (cars, trucks, buses, drone delivery systems) and the You can choose to share it
accompanying services, and not so much by the sales of vehicles itself anymore. sometimes but not other times.
That’s 100 percent what will
To make autonomous driving work, advanced technological capabilities such as automated occur. It’s just a question of
vehicle guidance, braking, cameras and sensors for collision avoidance and lane-changing when.”
systems are needed. AI is used in this context to analyze information in real time.
One of the main needs for autonomous vehicles to work on a full scale is the new mobile network – Elon Musk, Tesla co-founder
standard 5G, which has a considerably lower latency compared to current mobile networks. This and CEO
is important for the communication between vehicles, network, infrastructure, pedestrians etc. as
all decisions have to be made within the split of a second.
83
Consumers are concerned about safety and loss of control
Willingness to be a passenger in a self-driving vehicle, by age
Share of respondents
0% 10% 20% 30% 40% 50% 60% 70% 80%
Technical feasibility is by far not the only
challenge for autonomous driving. Today
even minor accidents involving
14-17 71% autonomous vehicles make headline
news. People are mostly concerned
about safety and not being in control of
the situation at all times.
These attitudes are bound to change,
18-34 61% though, if the technology improves to the
point where it is considered safe by all
standards.
Age also plays an important role in
35-54
regards to how open people are to
53%
autonomous vehicles. Around 70 percent
of 14- to 17-year-olds are willing to be
passengers in self-driving cars. This
share declines with each age group.
55+ 37%
Note: Worldwide; October to November 2017; 14-55 years; 21,000 respondents; online consumers
Source(s): Accenture; Harris Interactive
84
85
86
Projected autonomous vehicle market penetration worldwide between 2021 and 2030
Autonomous vehicles: global market penetration 2021-2030
14%
12%
12%
10%
Market penetration rate
8%
8%
6%
5%
4%
3%
2% 1.7%
0.8%
0.3% 0.5%
0.1% 0.2%
0%
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Note: Worldwide
Source(s): UBS; Intel; Nvidia
87
Size of the global market for autonomous vehicles in 2030, by segment (in billion U.S. dollars)
Autonomous vehicles: global market size by segment 2030

0 200 400 600 800 1,000 1,200
Robotaxi service 1,161
In-car time monetization 472
AV production & sale 243
Fleet management 188
Sensor modules 80
L2-3 ADAS options 71
AV Op. System 50
Semis: compute 30
Semis: sensors 23
Maps 10
Semis: memory 5
Note: Worldwide
Source(s): UBS
88
Global autonomous vehicle fleet revenue split in 2030, by segment (in billion U.S. dollars)
Autonomous vehicle fleet revenue split by segment 2030

0 10 20 30 40 50 60 70 80 90 100
Telematics 90
Cleaning and charging 44
Maintenance and repair 34
Financial services 19
Note: Worldwide
Source(s): UBS
89
90
Smart speaker unit shipments worldwide from 2016 to 2019 (in millions)
Global smart speaker unit shipments 2016-2019
100
95.25
90
80
70
62.25
Unit shipments in millions
60
50
40
30 27.66
20
10 6.57
0
2016 2017 2018 2019
Note: 2016 to 2018

Source(s): TrendForce
91
Size of the enterprise virtual digital assistant (VDA) market worldwide from 2016 to 2025, by
segment (in million U.S. dollars)
Enterprise virtual digital assistant (VDA) market size worldwide by segment 2016-2025
Software Services Hardware
25,000
20,000
Market in million U.S. dollars
15,000
10,000
5,000
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Note: Worldwide; 2016 to 4th quarter 2017

Source(s): Tractica
92
07 Summary & Outlook
On the path to stronger artificial intelligence – breakthrough
on the horizon?
Artificial intelligence has experienced both periods of growth and innovation as well as stagnation and frustration. Today, AI is in the
midst of another “spring“ period. Investment into AI technologies and companies has grown strongly over the past few years and is at
an all-time high. Where exactly AI is headed and what is going to look like in the near future is almost impossible to predict. However,
it is an accepted fact among experts, scientists, company executives, and politicians that AI will be one of the most disruptive
technologies impacting all industries, sectors, and society as a whole.
The economic impact of artificial intelligence is forecast to amount to several trillion U.S. dollars worldwide and will have a strong
impact on the gross domestic product worldwide. The effect will be much greater in developed countries such as the United States,
Korea, Japan and throughout Europe. China‘s economy and society are also set to be affected strongly by AI. The country is placing a
heavy emphasis on becoming the world‘s leader in artificial intelligence. With its current “New Generation Artificial Intelligence
Development Plan“ China aims to become the dominant player in the field by 2030. Other countries with investments to stake claim in
the market include India and Israel.
All of the major tech and internet companies are investing into artificial intelligence research, as well as full data for funding money.
Many tech and non-tech companies are investing in the field, and company executives recognize the potential of AI. However, there is
still uncertainty regarding what the real-life implications will actually look like.
There are also other uncertainties about potential (technological) developments such as quantum computing, which has the potential
to accelerate the development of artificial intelligence.
94
Glossary
Algorithm An algorithm is a set of rules (unambiguous specification) to be followed when solving problems. It is used for data
processing, calculation and other mathematical and computer operations.
Artificial intelligence (AI) is an umbrella term for several computer science technologies thriving to emulate and eventually improve on
the human brain. „Strong AI“ systems exhibit human intelligence by approximating, mimicking and replicating human thinking. Artificial
intelligence systems make use of sensors, cameras and other input to gather information and rely on huge sets of structured and
unstructured data to learn from and improve the system‘s capabilities.
Artificial neural networks (ANN) is an AI technique that mimics or tries to replicate the workings of the human brain. It is one of the
main concepts/frameworks used for machine and deep learning. Developed neural networks can, for example, extract meaning from
complicated data and detect trends and patterns too complex for humans to identify.
Cognitive era refers to a concept based on artificial intelligence and advanced cognitive systems. Technology in the cognitive era is
able to form hypotheses and make judgments based on the synthesis of big data. It has the ability to understand unstructured data,
reason about it by considering arguments and generating hypotheses and learn from experts, interaction and the intake of data.
Computer vision is an interdisciplinary field of computer science dealing with enabling computers to see, identify and process images.
It aims at giving computers a high level of understanding of these images similar to humans.
95
Glossary
Deep learning uses neural networks and large data sets (big data). In many aspects, the concept is inspired by the human brain.
Based on existing information and the neural network, the system is capable of connecting what it has already learned with new content
and information to continuously learn more. As a result, the system has the ability to make predictions and decisions.
Machine learning is a subset of AI focusing on the ability of machines to learn for themselves from sets of data. These systems take in
information and process it, changing algorithms as they learn more about the processed data. Machine learning systems are able to
learn from this process and make predictions or determinations based on the results.
Natural Language Processing (NLP) is a subfield of AI that helps computers understand, interpret and manipulate human language. It
combines linguistics with computer science to identify and understand spoken language as well as text-based language.
Pattern recognition is a branch of machine learning (supervised/unsupervised) that is used to recognize patterns and regularities in
data sets. It makes use of computer algorithms to discover these regularities and then classifies the data into different categories.
Pattern recognition is the basis for computer-aided diagnosis systems in medical science. Other applications include speech
recognition, image recognition and classification of text into categories.
Reinforcement learning uses some form of conditioning where the AI system gets “rewarded” for a positive/correct result or “punished”
for a false one. It allows the machines to learn by interacting with its environment.
96
Glossary
Smart/AI intelligent robots are artificial intelligence systems that can learn from their environment and build on this knowledge to
improve their capabilities. They can be considered a bridge between AI and robotics as they are robots controlled by AI
systems/programs.
Software frameworks are platforms for developing software applications. They provide functionalities that can be selectively changed
by additional user-written code.
Supervised learning With this method, training data sets (characteristics, patterns, dimensions etc.) are provided to the system for
„correct answers“ are already in the data sets so that the system can use the examples when classifying new sets of data. Credit card
fraud detection is an example of a supervised learning algorithm.
Unsupervised learning is not using training data sets but unclustered data and therefore has no corresponding output variables on
which to base the classification of data. The goal for unsupervised learning is to model the underlying structure or distribution in the data
to learn more about it.
Virtual digital assistants (VDA) are software application programs that make use of natural language processing to interact with a
user. They deliver voice- or text-based information to the user and can perform tasks or services. They are sometimes referred to as
“chatbots”. Apple’s Siri, Google Assistant, Amazon Alexa, and Microsoft Cortana are examples of VDAs.
97
Sources
451 Research International Telecommunications Union
5G Americas IP Pragmatics
ABI Research J.P. Morgan
Accenture Kleiner Perkins Caufield & Byers
China Academy of Information and Communications Technology KPMG
Capgemini LinkedIn
CB Insights McKinsey
China Money Network National Institution for Transforming India
Cisco Systems Nvidia
CISPT Politics + AI (Medium.com)
CIRP Price Waterhouse Coopers
Consumer Technology Association RIETI
Crunchbase Roland Berger
Deloitte Semiconductor Industry Association
DHL South China Morning Post
Forbes Tractica
Fortune Trendforce
Frost & Sullivan Tsinghua University
Gartner Towards Data Science
GitHub UBS
Grand View Research Venture Scanner
Harris Interactive World Economic Forum
Hyperion Research WSTS
IC Insights Yole Development
IDC
Intel
International Federation of Robotics
International Labour Organization
98
Authors, Imprint, and Disclaimer
Arne Holst
Senior Researcher
Arne Holst is the Statista

research specialist for
technology and
telecommunications with more
than seven years of experience
in the industry. He is an expert
for top tech trend topics like
digital transformation, IoT, AI,
VR, Industry 4.0 and smart
everything.
E-M ail: arne.holst@statista.com
June 2017
Released: December 2018
Imprint
Statista, Inc. ▪ 55 Broad Street, 30th floor ▪ New York, NY 10004 ▪ +1 (212) 433 2270 ▪ www.statista.com
Disclaimer
Statista, Inc. shall not be liable for any loss, injury, claim, liability, or damage of any kind resulting in any way from (a) any errors in or omissions from the Statista, Inc. industry report(s) or
any Materials available or not included therein, (b) the unavailability or interruption of the Statista, Inc. industry report(s) or any features thereof or any Materials, (c) An Authorized User or
Member's use of the Statista, Inc. industry report(s), Online Services, or Materials, (d) the loss or corruption of any data or equipment in connection with the Statista, Inc. industry report(s), (e)
the content, accuracy, or completeness of Materials, all regardless of whether you received assistance in the use of the Statista, Inc. industry report(s) from a Covered Party, (f) any delay or
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ARTIFICIAL

▪ Market size ▪ AI frameworks/computing & semiconductors

02 Leading Countries 06 Applications & Industry Impact

▪ Funding & companies ▪ Industry & sector impact

03 AI Investment Today 07 Summary & Outlook

▪ Patents & papers

IDC (September 2018) Tractica (June 2018) MarketsandMarkets (February 2018)

Note: Worldwide; 2018

Low estimate High estimate

Note: Worldwide; 2018

Note: Worldwide; 2018

Note: Worldwide; 2017

Increased productivity from labor substitution 15%

Innovation / market extension 10%

Global data flows 2%

Wealth creation / reinvestment 6%

Gross impact 37%

Transition costs -8%

Negative externalities -7%

Net impact 21%

Note: United States; 2018

Note: Worldwide; 2018

Note: Worldwide; November 2017 to July 2018; 313 Respondents; companies

Western Europe United States

Percentage change in working hours

▪ Funding & companies

Personnel Monetary Impact Competitiveness Research & Education Technology

Note: Worldwide; as of June 2018

Note: Worldwide; 2018

AI talent Top AI talent

Note: Worldwide; 2018

Number of AI professionals in thousands Linkedin estimated the number of AI

United Arab Emirates 16

Note: Worldwide; 2017

Biological Knowledge Mathematical Other

Number of patents granted

USPTO (United States)

Note: Worldwide; 2000 to 2016

Number of patents granted

Chinese university 725

U.S. university 241

ROW universities 118

Note: Worldwide, China, Japan, United States; 2000 to 2016

United States 369,588

United Kingdom 96,536

Republic of Korea 52,175

Taiwan, China 46,138

Note: Worldwide; 1997 to 2017

140 135.5 134.5

Note: Worldwide; 1997 to 2017

Note: North America; 2018

4,000 amounted to around 85 percent of overall

Note: United States; 2012 to 2018

Funding in million U.S. dollars

Smart cars 128.7

Cloud and big data 74.6

Quantum and high performance computing 57.3

Strategic technologies 55.2

Leading electronic materials 27.2

Smart medical devices 13.9

Note: China; 2015 to 2018

Note: China; 2015 to 2018.

Consumer goods, accomodation and food services 14.5% 14%