Venture capital investments in artificial intelligence

Artificial intelligence (AI) technologies have significantly attracted the attention of institutional investors over the last decade. However, previous literature has not deeply explored the characteristics of venture capital (VC) investments in AI ventures. In this study, we explore whether and to what extent investments in AI ventures differ from those in similar non-AI ventures, and whether they are moderated by venture-level, country-level, and investor-level factors. We test our hypotheses on a sample of 5235 investments in 2689 AI ventures and 9215 investments in 4373 non-AI ventures belonging to the Industry 4.0 domain, observed from 2000 to 2019. We find that the amount invested in AI ventures is significantly lower than non-AI ones: this negative relationship is, however, moderated by a venture's development stage, VC investor's experience and the AI development level of the country in which the invested venture operates.