2020 has finally come to an end. Although the world is still shrouded in the shadow of the Black Swan event of COVID-19, the crisis has reached a turning point. As the pandemic continues to affect all parts of the world, many organisations, companies, and startups have turned to big data and AI to transform and optimise the efficiency of business activities, directly accelerating the overall development of the AI industry.
According to IDC’s report, the global AI market in 2020 will amount to US$156.5 billion, with a growth rate of 12.3 per cent, of which 80 per cent will be attributed to software. IDC also optimistically expects that the market size of the AI industry, considered by some as a blue ocean, will compound at an annual rate of 17 per cent and exceed US$300 billion by 2024.
For various AI initiatives and applications to flourish, data centres must be fully developed to support the storage of data and training models, brain-like IaaS (information-as-a-service), and PaaS (platform-as-a-service) cloud services. After meeting the performance requirements of AI for cloud services, data in various fields such as finance and manufacturing can be used more efficiently to accelerate AI technology.
It should then come as no surprise that leading international cloud players such as Google and Microsoft have recently announced their intentions to deepen their investments in Taiwan’s AI Infrastructure.
Last September, Google unveiled that it would build a third data centre in Yunlin, while Microsoft disclosed at the end of October that it would set up its first Azure data centre in Taiwan.
As Taiwan’s future cloud infrastructure realises, developers will no longer need to build services through overseas data centres, which will accelerate AI innovations and applications by local teams, especially in areas that are more sensitive to data sovereignty, such as finance.
Every six months, AppWorks releases an updated Taiwan AI Ecosystem Map, distilling the latest trends and developments while highlighting various companies leading the charge. In the process of reviewing the overall ecosystem changes, we have observed the following trends in the second half of 2020.
Taiwan’s AI Ecosystem Second Half 2020 is produced by AppWorks and is updated every six months
AI in healthtech has attracted investors’ attention
Although the pandemic has negatively impacted economic productivity and overall investor appetite, it has unequivocally accelerated the adoption of AI innovation in healthcare. Despite the rather barren investment landscape in the first half of 2020, aetherAI, which provides medical imaging AI development services and AI digital pathology systems, managed to close a US$6 million Series A round led by Quanta Computing.
In the second half of 2020, Deep01, which assists medical staff in interpreting computer tomography (CT) and provides an AI image interpretation system for cerebral hemorrhaging, successfully raised NT$80 million (US$2.7 million) in seed funding led by ASUS Capital. In addition, Heroic-Faith, which pioneered innovative medical devices such as an AI stethoscope and a smart respiratory monitoring system, also completed a US$4 million series A round of fundraising in 2020.
Also Read: What is the state of Taiwan’s AI ecosystem?
Moving forward, the next step for Taiwan’s healthtech and AI industry is to go global. As the main markets for medical AI-related products are still focused in developed countries such as the US, Japan, and Europe, Taiwan’s visibility coupled with the impact of the pandemic will have an effect on an international scale. Whether these innovative startups can successfully go overseas to scale will become the focus of attention in the future.
Corporates are accelerating their search for transformation and collaboration opportunities
For many traditional Taiwanese companies, big data and AI have been at the crux of their digital transformation initiatives and overall search for the next growth engines. In 2020, Commonwealth Magazine and Europe’s IMD jointly released the first digital transformation survey between Taiwan and Europe.
It pointed out that up to 52 per cent of Taiwanese companies have not yet been digitally transformed, and only 4 per cent of companies achieved or exceeded their digital transformation goals. Whether it’s in-house big data and AI project teams or looking for partners in the startup world, it has become the newest goal for companies to innovate.
The most direct model is creating corporate venture capital (CVC) arms to invest in new ventures with strategic value. In addition to investment, Taiwan’s major companies are also exploring other collaborative models. For example, one of the world’s leading manufacturers of IoT systems Advantech worked with StarFab to establish an accelerator.
Wistron, on the other hand, not only promotes upgrading the industry through partnerships with startups but also actively lays out future transformations. They collaborated with NCTU to establish embedded AI research centres, and jointly planned Wistron Lab @ Garage+ with Chia Hsin Cultural Foundation and Times Foundation to find growth opportunities in the next decade.
Taiwan’s AI ecosystem is bolstered by the successful prevention of the epidemic
Due to the success of the Taiwan government and all citizens and residents in fighting the pandemic, Taiwan’s AI ecosystem continued to flourish in the second half of 2020. On the startup accelerator side, AppWorks Accelerator has been recruiting specifically for AI startups since August 2018, fostering a total of 84 teams from both inside and outside of Taiwan.
Other community partners such as Microsoft for Startups, SparkLabs Taipei, and Taiwan AI x Robotics Accelerator also recruited a number of AI-related startups to inject new energy into Taiwan’s AI ecosystem. In the second half of 2020, due to the proper control of the coronavirus, it was relatively safe to host physical events in Taiwan. The largest startup event 2020 Meet Taipei showcased many startups using AI and big data to create more value-added services.
Also Read: How Taiwan’s blockchain industry is powering through the downturn
Taiwan AI Academy, Taiwan AI Labs, and the Artificial Intelligence Foundation are Taiwan’s representative institutions in the field of AI education and research, and continue to inject talent and innovative technologies for the development of AI in Taiwan. With the support from the government, institutions, and overall ecosystem, Taiwan can continue to promote the implementation of AI in various industries and integrate innovation into traditional businesses.
This gives an opportunity for startups to leverage the resources that Taiwan can offer and connect with players in the ecosystem that are upgrading Taiwan’s AI capabilities.
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