Artificial Intelligence and Machine Learning M&A sees bump in 2018

Deal Values Soar in Machine Learning Space: As the Internet of Things expands and the amount of data being generated and collected continues to grow exponentially, Machine Learning is becoming a crucial part of managing and analyzing that data. Artificial intelligence can allow companies with high-volume data processes to vastly improve efficiency and productivity. However, growth in the AI / machine learning space has been slow until recently. McKinsey reported that in 2017 companies spent $39 billion on AI, three times more than in previous years. Furthermore, there has already been 70% growth in business value in AI during the first quarter of 2018, reaching $1.2 trillion (Forbes).

According to a recent survey, 61% of organizations most frequently picked “machine learning / artificial intelligence” as their company’s most significant data initiative for next year (Cloudcomputing News). While market growth was slow for the past several years, 2018 is poised to be an explosive year for AI and machine learning investment. A few notable transactions indicate the recent surge in deal values during the first half of 2018:

S&P Global acquired Kensho Technologies for $550 million in March of 2018, making it the largest AI transaction value on record. Kensho is a leading edge provider of next-generation analytics, artificial intelligence, machine learning, and data visualization systems to Wall Street’s premier global banks and investment institutions, as well as the National Security community.

In May of 2018 digital identity verification company Mitek Systems acquired A2iA SAS for $49.7 million. A2iAa uses artificial intelligence and machine learning to create proprietary algorithms that process millions of checks, IDs and documents each day for banks, retailers, insurance companies, mobile operators, healthcare providers and governments.

Other notable transactions in the AI/machine learning space include Paypal’s acquisition of Jetlore, a predictive retail startup; Microsoft’s acquisition of Semantic Machines, a conversational AI startup; Intel’s acquisition of Nervana, a startup developing specialized AI systems ranging from software to chips; TD Bank’s acquisition of Layer 6, developer of prediction engine combs through internal data sources to anticipate the needs of customers in real-time; and Verizon’s acquisition of Niddel Corp, which offers a threat-hunting platform based on machine learning technology.

Big players, ranging from technology to finance, clearly see the inherent value in AI and machine learning technology, leading to the sharp uptick in volume and value of deals in the space during early 2018.

By wpteam