Top 3 Challenges for Artificial Intelligence (AI) Startup Companies


This post contains information for those startups and entrepreneurs who want to create Artificial Intelligence apps. Herein, we’ve compiled top three challenges that Artificial Intelligence startups can face.

Whether we believe it or not, we’re in the midst of the gold rush in Artificial Intelligence (AI) that has created a buzz in the market. According to the 2017 survey by McKinsey Global Institute, “Out of 3,000 AI-aware executives, only one in five are using any Ai-related technology in core areas of their businesses”.

In a simple word, people are not much aware of AI. Also, startups are not sure where to apply it, and how to ensure a return on their investment and most of us have a question – how to implement it?

Winning with AI requires serious analysis about where to play and how to win backed by rapid investments in software, data and machine learning.

All top of that, the important thing is that where to start? It is important to know more about Artificial Intelligence.

What Do We Mean By Artificial Intelligence (AI)?

Basically, AI describes a family of technologies, in a rough sense, it can be simply compared to human brain. However, AI may never replicate the creative problem-solving as people are capable of, but it differs enormous processing power and decision-making skills.

In a practical sense, we can say that it will never get bored, get tired or call in sick on Monday morning. The advantage of AI means that, in certain situations, it can perform work in mere minutes. AI technology simply half our work, and serves to augment the decision-making ability of human beings. Rather than having a security guard watch hours of surveillance footage, an AI solution can flag instances of a suspicious activity, and greatly lessen the human workload.

AI is advantageous because the software does not need to be 100% accurate. Even though an algorithm is 80% accurate that saves an incredible amount of time and the accuracy improves with the use.

Essentially, AI can manage and assess the mass quantity of information. But, it requires a degree of human input and efforts to get direction. Autonomous AI receives attention because of the latest innovations like self-driving cars.

If you as a startup are waiting to begin with artificial intelligence applications, then do not delay. This is due to the fact that AI is going to revolutionize the world more than any other tech advancement of the past 30 years. Like the internet, AI will produce a rich-get-richer environment, and those who get a head start are going to run the table.

Also Read: Top 7 Artificial Intelligence Frameworks and Tools

In the below image, you can see the global quarterly financing history from 2011 to 2016. It shows an unusually high percentage for a horizontal sector. Have a look:


Key Trends and Highlights of Top 100 AI Companies

  • Google is world’s one of the largest AI companies. Apart from this, the top 100 AI startup companies like SoundHound, ZestFinance,, Leap Mind, SenseTime, etc. have raised $11.7 billion in equity funding across 367 deals in December 2017.
  • Some of the AI startups are specializing in particular industries like medication adherence, sales, and finance.
  • The China-based company, ByteDance has raised $3.1 billion in 2017, which uses AI for personalized news and recommendations. According to the very latest report from TechCrunch, “TikTok parent Bytedance has secured $1.45 billion for AI (Artificial Intelligence) and content.”
  • Geographic distribution: Top 100 AI startups are from 9 different countries, including France, Japan, Canada, Taiwan, United Kingdom, Spain, and Israel, which are on to AI 100 in 2017.
  • The majority of AI startup companies were from 13 states in the U.S.

The Booming Artificial Intelligence Categories Globally

The booming artificial intelligence categories, including

  • Cybersecurity AI
  • Healthcare AI
  • Enterprise AI


Image Source: cbinsights

Now, moving ahead! Here are the major challenges that AI startups can face, let’s check them out.

Top 3 Challenges for AI (Artificial Intelligence) Startup Companies Could Face

Challenge #1: Competition

Artificial intelligence is fascinating. If you are AI startup and want to try to patent something or invest in creating AI apps, then it is certainly useful to think about the competition in the marketplace. Undoubtedly, one of the biggest challenges for startups is to face competition. The competition is intense because the barriers to entry are relatively low, and there is plenty to access venture capital.

If startups can find a niche market and differentiate themselves from their rivals, then there is nothing greater than this. If we widen the spectrum of what is being patented worldwide at any level and from any organization, it seems clear that the most of AI patents focus on enabling intelligent robots such as self-driving cars by Uber, automated delivery drones by Amazon, AI assistants apps like Siri, Cortana, Bixby, and Google Assistant, plus deep learning, face recognition and AI hardware, which is specifically in China.

US and China are two countries where most of this innovation is happening in AI niche followed by Japan, South Korea, Germany, Canada, the U.K., Australia, India, and Russia. Currently, various opportunities exist for the entrepreneurs because the demand is rising even faster. AI and machine learning with its massive datasets and its trillions of vector and matrix calculations have a ferocious and insatiable appetite.

Challenge #2: Adding Technology Partner

After rapid expansion in business, it’s time to find and hire talent in terms technology partner to help tackle the AI startup’s growing needs. It is important to focus on hiring a technically-sound enterprise mobile app development companies, which are capable of developing artificial intelligence (AI) apps. However, success would not happen overnight.

Let us take an example of Google. Currently, Google is the world’s largest AI company attracting the best AI minds, and spending small country size GDP budgets on R&D. In contrast, the tech giant gets billions of users for its services. It is just a matter of putting some extra efforts. AI is powering autonomous vehicles, Google’s search, speech recognition, intelligent reasoning, a massive search and even its own work on drug disease diagnosis.

In short, if you are planning to hire a technical partner for your AI startup, then you need to consider the following things:

  • The technical partner should have a vast experience and skills as they can work on your app idea.
  • You can tell about your expectations.
  • Before finalizing your technical partner, make sure the company must be updated with the latest trends of AI.

Challenge #3: Fast-paced Market

Artificial Intelligence has already changed the world. As technology moves at an incredible speed whether it is about artificial intelligence or robotics. AI is also driving a race for the best vertical industry solutions. Also, startups should strive for innovation as they can easily become distracted by new projects, markets, and technology, losing sight of their niche market that makes them valuable.

However, billions are being invested in AI startups across every industry and business functions. In 2016, Google, Amazon, Microsoft, and IBM were in the biggest fight due to AI solutions.

Additionally, we can say that we’re now entering a truly golden era of artificial intelligence. So, in order to prosper AI startups, you need to have access to unique data sets, deep domain knowledge, an ability to attract, and retain the increasingly in-demand AI talent. AI startup winners will be those who can solve valuable real-world problems, scale go-to-marketplace quickly, and build defensible positions. AI startups should focus on enterprise and industry solutions.

Wrapping Up

Indeed, the software has overpowered the world; however, artificial intelligence (AI) is taking over software. However, being a startup, if you are thinking to create AI-based mobile apps, then there is a good news for you.

The increase in adoption of ai in mobile apps development has helped many businesses to engage more customers and drive more revenue. Then, you can imagine how these startup companies Microsoft, Google, Apple have changed the way user communicate, and increase the reach, and succeed in mobile app retention. Indeed, unstoppable artificial intelligence technology is driving new possibilities.

If you have an idea to develop android app in AI and machine learning niche, then you can get in touch with us through the below-given form. Our sales representative will right back to you within 48hrs.

This page was last edited on October 22nd, 2020, at 11:05.


Have an App Idea?

Get your free consultation now

Leave a Reply

Your email address will not be published. Required fields are marked *