Of the 70 product categories tracked by PitchBook, only 21 are on pace to grow in VC funding in 2022, driven by leading vertical applications including sales & marketing, information security, and drug discovery. Our Q2 update of AI & ML Emerging Tech Research includes updated market size estimates and spotlights on private companies, including Databricks and DataRobot. The report also tracks major industry trends--covering AI struggles in code completion, developments in streaming data pipelines, and how synthetic data is being used to simulate data for robotics and autonomous vehicle training.

Breakthrough AI innovations stand out amid chillier market conditions VC investment in AI startups slumped around 21% quarter-over-quarter to $23.9 billion in Q1. However, the total remained in line with quarters prior to Q4 2021, and median late-stage valuations rose more than 11% to $100.0 million. While most of the categories within AI & ML are on pace to decline in VC funding this year, standout sectors including accounting automation, autoML, genetic analytics, and supply chain optimization continued to grow. On the exit front, PitchBook analysts predict that an uptick in AI mega-exits will be pushed out until market conditions improve and acquirers can bear the high operating costs of building sophisticated AI models. Our Q1 update of AI & ML Emerging Tech Research dives deep into the vertical's investment activity and trends, comprehensively assessing emerging opportunities in Conversational AI, silicon photonics, and revenue operations.