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Artificial intelligence companies are a prime acquisition target for companies looking to leverage AI tech without building it from scratch.

Artificial intelligence has long been a major focus for tech leaders across industries. From healthcare to retail to agriculture, companies are trying to integrate machine learning (ML) into their products. At the same time, there is an acute shortage of AI talent. This combination is fueling a heated race to scoop up top AI startups, many of which are still in the early stages of research and funding.

Tech giants like Facebook, Amazon, Microsoft, Google, and Apple have all been aggressively acquiring AI startups for the last decade. Apple leads the way with 29 total AI acquisitions since 2010. That’s nearly twice as many acquisitions as second-place Google (the frontrunner from 2012 to 2016), with 15 acquisitions.

The acquisition spree signals a recurring theme in high tech. When companies get big enough to dominate a piece of the market, they fundamentally lose their ability to innovate internally. They have to buy their innovation through acquisition. We appear to be approaching that stage in the cycle where tech startups deliberately develop capabilities aligned with a particular vendor’s architecture and standards to make themselves a more attractive target. But other characteristics – especially proprietary data and talent with domain expertise and connections – remain more important to buyers.

Meanwhile, the AI space continues to attract acquirer attention, with 90+ acquisitions in 2021 so far this year.

Michael Conlin

Michael Conlin​

Chief Technology Officer​
Phone: (703) 216-5856​​

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