Sometimes the history is more golden than it actually seems, and it’s a mandate to trace back in that case. The role of AI during the chaotic year of 2020 is one such golden page that one must flip back to understand how technologies will lead us to our future.

So, let’s time travel!

In the first quarter of the dreadful year 2020, AI firms in the United States raised $6.9 billion, a record-breaking rate amidst the coronavirus catastrophe.

In the first quarter of 2020, AI startups outpaced the whole venture capital market in the United States.

However, experts predicted that the COVID-19 epidemic would have a significant influence on global funding for the rest of the year, affecting all businesses and sectors. 

According to the National Venture Capital Association‘s estimate, about 285 AI-related firms in the United States raised a total of $6.9 billion in the first quarter of 2020. If the current rate of expansion continues, AI funding will likely surpass the $19.98 billion raised by 1,509 businesses in 2019, according to the PitchBook-NVCA Venture Monitor Q1 2020.

These data provide the latest evidence of the massive influence that technologies like machine learning and artificial intelligence are having across a wide range of businesses. Venture capitalists are more prepared to gamble in firms they believe in and perceive as significant winners in the approaching era of digital transformation as data collection methods, and algorithms improve and grow.

Despite the fact that the broader venture capital market has been declining, AI companies maintained strong momentum in 2019. Even before the COVID-19 lockdowns became a hindrance to corporate operations, the global venture capital market remained roughly flat in the first months of 2020, in contrast to the expanding AI financing.

The sums raised in the last few years were significant increases over the preceding decade’s average annual investments. This momentum, however, will be severely stifled in the second quarter of 2020, as venture capital, like the other sectors of the economy, will take a tremendous hit.

Given the current state of affairs, venture capitalists have not completely abandoned their interest in startups, but they have become much more cautious in their approach. Their primary focus has turned to ensure that their existing portfolio companies have sufficient cash flow and business continuity. And this will remain to be the guiding factor in the years to come.

Even amid the viral outbreak, new transactions are being made, but they are primarily those that were already in the works before the epidemic. If shelter-in-place orders remain in effect, the rate of investment is expected to slow. Without in-person meetings with the founding teams, the venture capital business would not be able to exist.

As a result, the agreements that are currently in the pipeline are receiving the majority of the funding, while all new transactions are on hold until things return to normal. And, standing in 2022, we are still striving to overcome the aftermath of the pandemic, and the world strongly believes, backed by the data, that technologies will guide us to the light of growth and advancement after all this is finally over!

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