Google Goes All In On Artificial Intelligence

Google (Shutterstock photo)Google (Shutterstock photo)

Google (GOOG, GOOGL) CEO Sundar Pichai has said that Google is no longer a mobile-first company. Rather, its focus is now on artificial intelligence and the promise that the technology entails. Some companies have paid lip service to embracing the technology, but Google is putting its money where its mouth is - in a big way.

First detailed by Axios, Google has reportedly launched a venture capital fund to focus solely on artificial intelligence.

The fund is reportedly led by engineers, as opposed to traditional venture investors, with the company investing between $1 million and $100 million at a time. It would stand alone from GV (formerly known as Google Ventures) and CapitalG, which is Alphabet's growth equity investment fund.

While the list of names that this AI-first fund could invest in are limitless (Re/code has put together a few speculative names), it's clear Google wants to dominate as much of the AI space as it can, outdoing Amazon (AMZN), Apple (AAPL), Facebook (FB), and Microsoft (MSFT).

In his newsletter, venture capitalist Ben Evans said the move could help strengthen the pipeline for "acqui-hires," a move when a company wants to hire employees from another company, so it just buys the company altogether.

This mindset fits with other publicly available data. Reuters reported that 34 AI-focused companies were acquired in the first quarter of 2017, more than twice than in 2016, according to data from research firm CB Insights. Google has been the leader, buying 11 companies since 2012, ahead of Apple, Facebook and Intel (INTC).

Google is going up and down the pipe when it comes to AI -- whether it's soft AI you see in your phone, or working towards general AI -- and it wants to own as much of it as it can. It's even building its own chips, known as tensor processing units, to help aid with machine learning. While Nvidia (NVDA) is still seen as the dominant chip company when it comes to doing AI tasks, it's notable that Google (and reportedly Apple as well) are trying to go up and down the stack as much as they can.

Just looking at some of the recent announcements Google has made, most notably Google Lens, it's clear that AI is going to touch almost everything Google does in the future.

This VC fund is just another part of that strategy, one where Google tries to throw as many darts at the board and see what works.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Chris Ciaccia

Chris Ciaccia


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