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Through massive investments in artificial intelligence (AI) startups, the world’s leading tech firms are racing to create markets to transform the economic landscape.

According to a report by CB Insights, since 2011 mergers and acquisition activity in the sector has increased sevenfold, with most startups being acquired in the first four years of their initial financing round. In 2016, AI startups drew significant attention, with $1.05 billion pouring in during the third quarter.

Here is a look at some of the many tech firms that are investing in AI research in order to capitalize on the shifting digital market.

1. Alphabet

One of the most active tech investors since 2011 is Alphabet. In the past five years, the firm has acquired as many as 11 companies closely associated with artificial intelligence. Google already uses RankBrain, an algorithm learning artificial intelligence system used in Google Search, for understanding queries and processing suitable responses. Two years ago, Google acquired AI company DeepMind Technologies for over $500 million, which resulted in 5 percent savings in power usage efficiency and a 40 percent reduction in cooling costs.


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DeepMind recently released WaveNet, which generates a raw audio form and impersonates any human voice, making it sound more natural than the best existing text-to-speech systems. DeepMind’s technology is accessible to firms that run on Google’s cloud.

Google is now betting bigger on AI by breaking into the $294 billion market dominated by Amazon and Microsoft. Through an investment of $30 billion in Google Cloud Platform, Google uses machine learning and artificial intelligence to analyze and reveal patterns in large and complex data sets. Google recently acquired Kaggle, a service connecting 850,000 data scientists and machine learning enthusiasts to create the most accurate predictive models and market models.

2. Intel

In 2016, Intel acquired Itseez, Nervana Systems, and Movidius, on par with Apple’s acquisitions. Intel’s announcement to acquire Nervana came after Apple disclosed its deal to purchase Seattle-based machine learning and artificial intelligence startup Turi. With a plan to develop semiconductors for AI apps, Intel faces stiff competition from Nvidia, which specializes in graphics processing unit (GPU) chips and has seen a significant growth in the past few years. In 2016, Nvidia saw its stock price triple, but the firm’s market cap of $57.93 billion remains small in comparison to Intel’s massive valuation of $168.90 billion.

3. Microsoft

Microsoft is not far behind when it comes to tech investments in AI startups. The company has been investing in the AI technology for about 25 years now. In December, Microsoft Ventures launched an AI fund to focus solely on “investing in AI companies focused on inclusive growth and positive impact on society.” With new chatbot Zo, Cortana Devices SDK, and Skills Kit, Microsoft intends not only to expand its intelligence tools but to compete in global markets. The software giant recently acquired Maluuba and aims to double Maluuba’s Montreal office size in two years. In 2016, it made a major breakthrough with the introduction of a technology that “recognizes the words in a conversation as well as a person does.” To achieve this, the team used Microsoft Cognitive Toolkit, an in-house system for deep learning that allowed them to quickly process algorithms across several computers. Microsoft recently acquired SwiftKey, which analyzes data to predict what the user is going to type next.

4. IBM

With the most AI patents among its peers in 2015, IBM has invested billions of dollars in developing the Watson platform. Watson is a cognitive technology that analyzes and interprets data including unstructured text, images, and videos. IBM’s Watson is gradually venturing its knowledge into industries including health care, financial services, and regulatory compliance.

Recently, H&R Block announced an exclusive database that will incorporate IBM Watson. The introduction of Watson in H&R Block would allow tax professionals to deliver efficiently for unique tax situations and simultaneously allow clients to understand various filing options. On March 6, 2017, IBM and Salesforce announced that the two firms will be integrating their independent AI platforms (Watson and Einstein, respectively). The landmark global strategic partnership will provide predictive insights from unstructured data and assist companies in making smarter decisions.

5. Amazon

The company has already created buzz with Alexa, a voice-enabled assistant that recognizes and responds to voice requests instantly. Last year, Amazon launched a video that presented a utopian high-tech grocery store without cashiers. Amazon Go allows customers to shop using their phones, relying on AI and sensors to eliminate lengthy checkout lines. At AWS re:Invent in 2016, Amazon announced its new AI platform, which included Amazon Lex, Amazon Polly, and Amazon Rekognition. The aim is to generate sophisticated, custom intelligent systems by providing deep learning components to application developers and AI engines to data scientists.

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