The demand for artificial intelligence that can help solve real-world problems is only continuing to grow, and consequently, investors are receiving more pitches from startups claiming to be the next big thing.
Global revenue for A.I. is expected to grow 16.5% this year and by 2024, will break the $500 billion mark, according to IDC.
At Fortune Brainstorm A.I. in Boston on Tuesday, Sunil Dhaliwal, founder and general partner of Amplify and Reed Sturtevant, general partner on the investment team at The Engine, shared what they look for when deciding whether to back an A.I. startup.
For Dhaliwal, the “best companies” have founders who have the technical, academic background and also a deep curiosity about the world and the problem they’re trying to solve.
“Who brings those two things together? That’s what most customers need. They don’t need one of the other. They need both,” Dhaliwal said.
He shared the example of one of his portfolio companies, Covariant, which was started by a team of scientists from Berkeley, and Open A.I., which brought expertise in deep reinforcement learning and robotics.
“[They are] creating systems that allow logistics companies, manufacturers, people in the e-commerce fulfillment business to solve their biggest problems, which are human problems…people need to turn to robotics to solve those problems,” he said.
Sturtevant said he looks to academic research to help identify opportunities. Often times, he said researchers can be so “underwater” that they might not necessarily be at the place where they’ve decided whether to turn their academic work into a company.
While Dhaliwal said he doesn’t want to be in the position to help guide founders toward the problem they should be solving, Sturtevant said he has helped companies in this area.
“We do spend a lot of time helping these technical founders who are CEOs think about what’s the pull, why do people care,” he said.
Dhaliwal also shared one major pet peeve.
“I get most concerned when people are coming and pitching breakthroughs….or people who are wisely marrying A.I. with business application and it’s clear there’s nothing under the hood,” he said. “The reality is A.I. breakthroughs are few and far between.”
More tech coverage from Fortune:
- Warning: Hot gaming consoles and iPhone 13 are in short supply this holiday season
- Ethical leadership requires 6 qualities—and Mark Zuckerberg lacks two of them, argues a management expert from NYU
- Air purifiers and CO2 monitors are the new pencil and paper in classrooms
- What scooter company Bird has planned after its public debut and a rocky 2020
- Last year, advertisers boycotted Facebook over hate speech. Today, they’re silent
Subscribe to Fortune Daily to get essential business stories straight to your inbox each morning.
