Currently No. 3 in the world in AI, Israel, known as a global hub of tech innovation, will play a key role in creating the world’s AI future.

From autonomous vehicles and cybersecurity to smart, digital solutions for health and agriculture, AI is changing our world. Artificial intelligence, the hot new area within the tech field, will bring big financial rewards to countries with AI capabilities in the decades to come: PwC estimates that artificial intelligence could add USD15.7 trillion to global GDP by 2030.

As the AI revolution ramps up, a number of countries have already established strong AI credentials. According to a global study released in May 2018 by Asgard, a Berlin-based venture capital firm focused on AI, by far the country with the largest AI industry (40%) is the USA, followed be China (11%), Israel (11%) and the UK (7%). Why are these countries showing such strong leadership in this area?

USA: No. 1 in AI and going strong

The USA is the clear global market leader for artificial intelligence. By far, the US has the strongest AI ecosystem in terms of funding, number of companies and global reach. A total of 40% of all AI companies globally are based in America, making it the No. 1 country for artificial intelligence. The success of the USA is a model of how to be successful in AI development. The country’s leadership grows out of a mature, well-financed, and thriving digital ecosystem in Silicon Valley and the New York/Boston metropolitan area. With ample private funding for startups and more than 16 governmental agencies supporting AI companies financially and politically, the US also relies on the support of leading universities like Stanford and MIT as well as strong corporate R&D facilities from the likes of Google.

China: No. 2 and ambitions to be world leader in AI

Approximately 11% of all AI companies are based in China, a country with stated ambitions to be world leader for AI by 2030. To reach this goal, the government has been pumping billions into research centers in Beijing and Tianjin. And also key to China’s quick rise in AI is that the market for startups is very well-financed. China now has some 4,040 AI companies, according to a whitepaper released by the Beijing Municipal Commission of Economy and Information Technology in July 2018. Beijing is home to 1,070, or 26 percent of the national total. Moreover, Beijing-based AI enterprises accounted for 35 percent of AI companies that have obtained venture capital. In 2017, China-based ByteDance (known as Toutiao) raised the most money of any startup in the world: USD3.1B.

No. 3 Israel: The Startup Nation will be a key player in the AI future

With only 8.5 million citizens, Israel has a global AI market share of 11% and is equal to China. Israel has 40 times more AI companies per capita than the market leader USA. Long hailed as the “Startup Nation” and a hub of tech innovation, the close connection between the digital sector and the Israeli defense industry is a key asset to the development of AI. Israel’s prestigious universities, including Technion, Bar-Illan, Ben-Gurion, Jerusalem and and a strong, vibrant entrepreneurial ecosystem have helped bolster the growth of AI in the country.

Israel is currently ranked third in the world for innovation by the Global Competitive Index, having more than 430 artificial intelligence start-ups worth around $3.5 billion. Israel has a global ranking as No. 1 in R&D expenditure as percentage of GDP. Many global tech giants have set up AI R&D centers in Israel, further pushing AI development. Many Israeli AI startups have been scooped up by global tech giants, such as Intel’s USD 15 billion purchase of Mobileye in 2017.(Source:Daniel Singer)

No. 4 United Kingdom leads the way in AI for Europe

With a global AI market share of 7%, the UK stands head and shoulders above all AI players in Europe. UK companies in AI generally do well in the international competition for AI funding, research, and talents. With London being a global financial hub, this benefits funding for AI companies in the UK compared to other European countries. Additionally, the UK government has for years created an entrepreneurship and investor friendly environment. London’s M&A market works well, English is the region’s main language, and the UK has many excellent universities, including Oxford and Cambridge, that help to nurture talent and facilitate R&D.

What are the top cities globally for AI?

City hubs are essential for growth of a strong AI industry. Hubs are where capital, talent, and ideas are nurtured under high pressure and lively competition. Those who win the battle for employees, investors, and clients in their hub have the potential to grow into a world leader.

The Top 10 city hubs in order of size: Silicon Valley area, London, Tel Aviv, New York, Beijing, Boston, Tokyo, Shanghai, Los Angeles and Paris. These are followed by Berlin, Toronto, Shenzhen and Seoul.