Every year, of Stanford University Institute for Human Centered Artificial Intelligence Publishes a major report on the state of the artificial intelligence industry. This year’s report, published this week, spans 502 pages and contains a wealth of insights into cutting-edge technology. Looking at its section on the economics of the AI industry, it’s a surprising revelation that global corporate investment in AI actually fell last year for the second year in a row.
This may come as a surprise to some since 2023 was widely considered. Period of peak AI hype. New chatbots and companies spawn a lot, as top executives make hyperbolic rhetoric about the technology’s potential. And yet, a new HAI report notes that in 2023, total investment in AI…
… to fall to $189.2 billion, a nearly 20% decrease from 2022. Despite a slight decline in private investment, the most notable decline occurred in mergers and acquisitions, which fell 31.2% from the previous year. However, over the past decade, AI-related investment has increased thirteenfold.
According to the report, the peak of global corporate investment in AI was actually 2021. Total investment during the year reached $337 billion. In 2022, it then fell to $234 billion, before falling another $40 billion last year.
That said, the U.S. is still pouring money into AI at a rate that dwarfs all global competitors, and more AI companies were launched last year than ever before. The report notes that US investment in artificial intelligence last year was “about 8.7 times greater” than that of China, the next largest investor globally. Meanwhile, the U.S. saw 897 newly funded AI companies last year, again outpacing China, which launched just 122 new companies.
The report also states that, according to a survey conducted by McKinsey, organizations that deployed AI in the past year saw significant reductions in costs and increases in revenue, which, as the report states, is, suggesting that “AI is significantly increasing business efficiency.” In general, “business performance” can’t help but sound like a coded term for alienating humans and replacing them with algorithms. The report notes that “the most commonly adopted AI use case by function among surveyed businesses in 2023 was contact center automation,” with 26 percent of surveyed businesses saying that this AI Their primary use is for