More and more young German companies are using artificial intelligence (AI) in their products and services - a total of 62% more than in 2018. These are increasingly concentrated in the two AI hubs in Berlin and Munich, and only a few AI startups are created in regions such as Baden-Württemberg or North Rhine-Westphalia where medium-sized companies are traditionally located. Since 2009, around €1.2 billion has been invested in AI startups in Germany - but there is still a lack of investments by international standards. For example, the Chinese startup SenseTime alone received more than €2.2 billion from investors.
Germany's leading AI initiative appliedAI by UnternehmerTUM regularly publishes an update of its map, first produced in 2018. This contains the most important AI startups in Germany selected by a jury with the aim of documenting relevant developments in the field. While in 2018, 132 young companies used AI to a significant extent and became part of the AI map, this year there are already 214 - an increase of 62%.
In addition, industry-specific developments can be identified: Whereas in 2018 only 3.8% of all AI startups were in the manufacturing and industry sector, by 2019 this figure has risen to 5.6%. The development in the area of transport and mobility is even clearer: here the share rose from 6.1% to 9.3%.
The fact that startups are increasingly focusing on German core industries is good news. This development is fundamental for ensuring that established companies in this sector keep up internationally.
Dr. Andreas Liebl, Managing Director of appliedAI
AI startup landscape 2019
Average investment volume per AI startup in Munich almost twice as high as in Berlin
A few geographical hubs continue to dominate the AI scene. In particular, the concentration on Berlin and Munich is increasing: 86 AI startups (40.2%) are located in Berlin in 2019, making the capital the national leader [2018: 51 (+68.6%)]. Munich follows in second place with 57 startups (26.6%) [2018: 31 (+83.9%)], even though at €6.30 million, the average investment volume in Munich is almost twice as high (factor 1.8) as in the capital with €3.41 million. With 9 AI startups (4.2%) [2018: 6 (4.5%)], Karlsruhe follows at a clear distance in 3rd place [2018: 6 (4.5%)] and has thus overtaken Hamburg with 8 startups (3.7%) [2018: 9 (6.8%)] this year. The urban concentration of AI, together with the lack of skilled workers, is increasingly becoming a challenge - especially for rural SMEs, states Dr. Andreas Liebl:
The number of startups can also be seen as a measure of the attractiveness of the local ecosystem, the availability of talents and experts as well as the innovative capacity of a region and its economy. The increasing focus on Berlin and Munich shows that many regions are finding it difficult to create attractive conditions and to really anchor AI as a future technology on a broad basis.
Dr. Andreas Liebl, Managing Director of appliedAI
€1.2 billion for German startups - €2.2 billion for SenseTime
In Germany, around €1.2 billion has been invested in startups included on the AI map since 2009. But if you take a look at China, this sum seems like a drop in the ocean. There, the AI startup SenseTime, which is regarded as a leader in face recognition and deep learning, has received more than €2.2 billion since 2017 - including funding from leading Chinese venture capital investors and large corporations such as Alibaba and Qualcomm.
Enormous differences in size are remaining between the Chinese and German, but also the American and British startup landscape and can be deduced from the number of employees in German AI startups as well. The available data shows that just nine of all young German AI companies (4.2%) employ more than 100 people, while SenseTime alone has around 2,000 employees.
Accordingly, it is also politically important to create framework conditions as quickly as possible so that internationally relevant and competitive companies can be created in Germany - for example by awarding public contracts to startups and facilitating or promoting investments in the growth phase.
Dr. Andreas Liebl, Managing Director of appliedAI
Further information on the start-up map can be found here.
