The global AI gold rush is in full swing. Billions are pouring into startups promising to reshape industries. But in Africa, the flow is a trickle.
While the continent boasts over 2,400 AI companies, per a recent Afrilabs report , the sector has attracted a paltry USD 4 M across five deals in the second quarter of 2024, recent findings by business analytics platform CB Insights show. This is a stark contrast to the USD 23.2 B raised by global AI startups in the same period.
The disparity is glaring. Less than 1% of global AI investment is flowing into Africa. This is despite the continents immense potential, driven by a burgeoning youth population, unique challenges, and opportunities for innovative solutions.
Why the Lag?Several factors contribute to Africa's AI funding winter. Firstly, the continent grapples with a dearth of accessible data, a critical ingredient for AI development. Robust cloud infrastructure, essential for AI workloads, is also scarce.
Also, the funding landscape is challenging. While USD 2.02 B has been invested in promoting AI activities on the continent, 63% of African AI startups are still in their early stages, per the earlier-referenced research by Afrilabs, an innovation hub. This suggests that the journey to significant returns on investment may be longer.
