AI Austria Co-Founder Clemens Wasner in a video talk about the updated, greatly expanded AI landscape in Austria.
The full talk can be found here. (German only)
As the number of startups and specialized service providers is increasing and more and more research institutes and public institutions are also addressing AI, the AI landscape in Austria is continuously growing.
In Austria, there are only a handful of startups that go out of business every year. This may be partly due to the great funding system in Austria, but also because the demand for service providers is very high, which provides a good opportunity for a change of path to service delivery if the original product plan is not successful. This is a great advantage of Austria, as it is not possible in many countries due to liquidation preferences and due to the often private investment-driven aspect.
56% of startups and scale-ups bring truly industry-specific solutions, which could contribute to the fact that many startups are not heading in the direction of unicorns, but rather in the direction of SMEs or mid-sized companies. Another aspect is that many AI companies in this field are faced with the so-called "double PhD problem". They need employees who are not only specialists in AI but also need the domain knowledge for the task at hand at the same time. And many investors may also be pushing in the direction of focusing on one area rather than diversifying. Another factor contributing to the stability of many startups.
Unicorn in Austria?
Anyline is probably the only company in Austria heading in this direction at the moment. However, it is also important to mention that AI started with a very big hype worldwide, where many startups were rated with a value of many billions of dollars at that time, while now the ratings are becoming much more realistic again.
What's new in the AI Landscape?
Compared to 2020, there is a new layer to the graphical representation of the AI landscape, the "early adopters.”
In Austria, there are cooperations that have built up significant AI teams, but not only the really big ones like voestalpine and AVL List but also Fill, for instance, a company in Upper Austria that even has its own center for AI. They are customers of AI products from start-ups and at the same time, they are producing their own AI solutions.
The role of the public sector as the first customer of AI products is very pronounced in Austria, especially compared to other European countries. To name a few examples: BRZ, the City of Vienna (”Stadt Wien”), or the ZAMG, which is responsible for weather forecasting, have many connecting points for the use of AI products. The transparent presentation (e.g. the online presence of people and concepts) has attracted many international companies that want to work in the public sector in Europe and therefore start in Austria. It can also be observed that there are dynamic funding offers for different areas, reflecting the direction in which startups are most needed or welcomed in the future. Last year, data privacy and the need for trustworthy AI were very important, as also shown by the appearance of Mostly AI or Celantur.
Currently, we can observe that the focus is shifting to supporting CleanTech or GreenTech, where the funding agency FFG offers support.
Facebook, Amazon, and Snapchat in Austria?
That’s right! Facebook, Amazon, and Snapchat are conducting part of their AI research in Austria. Austria's education, science, and funding system, as well as its location, may play a role in why such companies choose to locate here. Although these trends are very promising, there is much criticism regarding Austria's AI strategy. Many other regions that are comparable in terms of science-driven innovation and start-up formation receive support from the national government to expand and flourish, such as Turin with 100-150 million euros or Amsterdam with 75 million euros. However, this type of investment in AI is lacking in Austria. For example, Amazon's research hub in Austria includes 25 employees, and a campus for 500 people is about to open in Amsterdam, which would also be possible in Austria, but not without the commitment from the government.