Silicon Valley loves a new fad. To judge by the spate of fundraising by start-ups in recent weeks, it has found one in an idea that is more than half a century old: artificial intelligence. "This is the hot place to be at the moment," says Stephen Purpura, whose own AI company, Context Relevant, has raised more than $44m since it was founded in 2012. By his reckoning, more than 170 start-ups have jumped on the AI bandwagon. The newcomers to AI believe that the technology has finally caught up with the hopes, bringing a heightened level of intelligence to computers.

Over 25 companies raised equity funding rounds in the last quarter. Deal activity was up 7x from Q1'11. Deal activity in artificial intelligence has now hit record highs for two quarters straight. Deal count had already leapt to 24 in Q4'15, ten more deals than the previous quarter. The trend continued in Q1'16, with deals reaching a 5-year quarterly high, and passing the 25-deal threshold.

Deal activity in artificial intelligence has now hit record highs for two quarters straight. Deal count had already leapt to 24 in Q4'15, ten more deals than the previous quarter. The trend continued in Q1'16, with deals reaching a 5-year quarterly high, and passing the 25-deal threshold. However, total funding dropped 18% to 83M from 101M in Q4'15, when over 20 companies raised funds. Our artificial intelligence category covers startups primarily focused on developing AI technologies, across areas including image processing, natural language processing, machine learning, deep learning, and predictive APIs, among other core applications.