AI investment falls for first time in a decade

The US experienced a 35.5% drop in investment last year, while China saw a decline of 41.3%

AI investment falls for first time in a decade

The AI Index Report 2023 [pdf], conducted by the Institute for Human-Centered AI at Stanford University, found that global private investment in AI reached $91.9 billion in 2022, down 26.7% from 2021's $125.4 billion.

The analysis also found that the number of funding events and newly financed AI firms fell in a similar fashion, as did M&A and IPOs.

Despite being a leader in financing corporate AI development, US investment was down 35.5% last year. China saw a decline of 41.3%.

While 2022 was the first year in a decade to witness a drop in private AI investment, the overall trend has been upwards. Private investment in AI was 18 times higher in 2022 than it was in 2013.

AI investment last year was highest in medical and healthcare, at $6.1 billion. The next largest areas were data management, processing and cloud ($5.9 billion), and fintech ($5.5 billion).

AI remains a topic of significant interest to policymakers, industry leaders, researchers and the public. The technology is under the spotlight for policymakers around the world, and firms using AI in their operations are seeing tangible benefits in terms of costs and revenue.

AI reaches its "era of deployment"

The new report highlights a shift in the release of significant machine learning models. Although dominated by academia until 2014, their use and development has since exploded in private industry.

In 2022, private industry produced 32 "significant machine learning models", whereas academia produced only three.

This disparity is primarily attributed to the extensive resources, computational power and data needed to construct AI systems.

The US remained the leader in ML model production last year, with contributions to 16 models, followed by the UK with eight and China with three.

Nevertheless, the latest AI Index Report indicates that the US is gradually losing its position, judged by AI conference and repository citations. By contrast, China's influence is growing; the country had the highest total of AI journal, conference and repository publications last year.

Chinese citizens are among the most optimistic about AI products and services. In a 2022 IPSOS survey, 78% of Chinese respondents agreed that products and services utilising AI have more advantages than drawbacks.

Respondents from Saudi Arabia (76%) and India (71%) also felt positive towards AI products.

Only 35% of sampled Americans agreed that products and services using AI have more advantages than disadvantages, among the lowest of surveyed countries.

The number of AI-related job postings in the USA has increased across every sector except for agriculture, forestry, fishery, and hunting - from an average of 1.7% in 2021 to 1.9% in 2022.

The general public were able to access generative AI systems like ChatGPT and DALL-E for the first time in 2022: systems with capabilities "unimagined a decade ago."

"However," the report authors warn, "they are prone to hallucination, routinely biased, and can be tricked into serving nefarious aims, highlighting the complicated ethical challenges associated with their deployment."

The AI Index Report 2023 indicates that the number of incidents related to the unethical use of AI is rising rapidly.

The AIAAIC (AI, Algorithmic and Automation Incidents and Controversies) database, which tracks incidents related to the misuse of AI, reports that the number of AI-related incidents and controversies has increased 26 times since 2012.

Noteworthy incidents last year included the creation of a deepfake video of Ukrainian President Volodymyr Zelenskyy surrendering to Russia, and the use of call-monitoring technology on inmates in US prisons.