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Emerging Tech Research: Artificial Intelligence & Machine Learning

Q3 2021

Emerging Tech Research: Artificial Intelligence & Machine Learning

November 17, 2021

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Why VC exits are beginning to outstrip investment in AI

VC activity in AI continued growing in Q3, with a record 1,395 deals worth nearly $26 billion in aggregate. Exit activity accelerated, too, with a quarterly record 127 exits also worth nearly $26 billion. While that figure marked a quarterly decline, AI's exit value continues to exceed VC investment in 2021.

Our latest Emerging Tech Research tracks the major storylines in AI and machine learning last quarter, including deep dives on consumer AI, edge AI software, and national defense.

Key takeaways

  • Through Q3, AI exits have topped $166 billion, more than triple 2020's total value for VC exits.
     
  • Horizontal platforms again led VC deal value, with Databricks, DataRobot, Dataiku, and Dataminr all raising rounds over $300 million in Q3.
     
  • Use cases achieving outstanding growth in 2021 include ecommerce recommendation engines, edtech, and transportation optimization.

Table of Contents
Vertical overview 3
Q3 2021 timeline 4
VC ecosystem market map 5
VC activity 6
Emerging opportunities 13
Consumer AI 14
Edge AI software 17
National defense 20
Select company highlights 23
Databricks 24
DataRobot 27
Samsara 29