Chief information officers (CIO) in corporate firms are choosing startups over established vendors on their way to acquire artificial intelligence (AI) and machine learning (ML) solutions.
Around 10% of their IT budget is already going to startups, according to a survey by Sapphire Ventures. The spending on startup partners is expected to increase to 15% over the next 12 months, says the report.
In the survey, 81% of technology leaders stated that they were making investments in AI and ML technologies, with a majority of 67% indicating that they would team up with startups for investing in AI/ML technology. 36% of respondents said they were investing in these technology solutions from established vendors.
The study confirms that most of the CIOs are interested in engaging with startups on AI projects rather than established vendors.
Most of the CIOs believe that startups deliver “more modern architecture, the faster pace of product delivery, better customer experience” and more responsive product roadmaps.
While CIOs look for startups for AI and ML solutions, they prefer established vendors when it comes to acquiring cloud and security solutions.
“The market’s interest in AI has not gone unnoticed,” says the report, adding that in 2018, AI startups raised a record US$9.33 billion, nearly 10% of the year’s total VC investments.