Turns out, fake European AI startups comprise nearly half, or 40 percent, of all companies classified as such, likely due to high-tech hype…
Here’s something that should surprise no one. A new survey by London venture capital firm MMC, purports 40 percent of European startups classified as AI enterprises do not actually use that particular technology in a “material” way.
Fake European AI Startups Represent 40 Percent Market Share
There’s always a trend for brands to latch onto and exploit. We’ve seen the “organic” label used on practically everything. Likewise, the “green” label, as well. When companies discover a new branding term helps to push products, there’s a mad rush to get in on the action.
Enter one of the most misunderstood and misused technologies today, AI or artificial intelligence. Few people know the difference between AI and machine learning. In fact, the two are used interchangeably all the time.
MMC studied 2,830 AI startups in thirteen different European Union countries, reviewing their “activities, focus, and funding.” In fact, David Kelnar, the head of research at MMC, told Forbes the following:
“In 40 percent of cases we could find no mention of evidence of AI…companies that people assume and think are AI companies are probably not.”
However, as Forbes notes, the companies themselves don’t often assign their own classifications. Instead, such labels come from third-party analytic sites.
But, whether misleading or not, it does pay off. MMC discovered startups classified as AI companies receive between 15 and 50 percent more funding compared to those which aren’t labeled the same.
Two of the most popular AI uses included chatbots, which represented 26 percent of companies. Another, fraud detection, which accounted for 21 percent.