The NYU Tandon School of Engineering and ff Venture Capital (ffVC), a leading early-stage technology venture capital firm based in New York City, this morning will announce New York City’s first program to launch and support artificial intelligence (AI) startups. The program will also mark the first time in the United States that a university and venture fund cooperate to create an accelerator-type program for AI.
The program, called NYU/ffVC AI NexusLab, will begin recruiting worldwide for five early-stage startups in leading sectors of the New York City economy, including software, data and security, health care, finance, and media and publishing.
AI is among the fastest-growing startup sectors, experiencing sevenfold funding growth from 2010 to 2015. With applications in self-driving cars, marketing, robotics, defense, human relations, and a vast range of software that performs analysis, prediction, and personal digital assistance, AI commercial applications are widely expected to skyrocket from the current market, conservatively estimated at $11 billion currently. Meanwhile, university graduates with AI experience are in high demand and research opportunities are on an upward trajectory.
“We are pleased to join ff Venture Capital in this innovative project that will accelerate the commercialization of a technology that has been incubating for decades in research labs and promises vast new opportunities for our students, faculty, the New York innovation economy, and all of society,” said NYU Tandon Dean Katepalli R. Sreenivasan. “Among NYU’s AI research strength across multiple schools, Tandon’s success in fostering startups, and the reputation of ffVC for spotting new ideas then calling in more resources than any funder of its size, I strongly believe the AI NexusLab will become a guiding light for other accelerator-type programs.”
“We’re excited to be partnering with an institution as esteemed as NYU on a program that we believe can help guide New York City to become the artificial intelligence center of excellence,” said ffVC Founding Partner John Frankel. “AI is an area that’s been on the cusp of mainstream for decades; we strongly believe that we have now reached a turning point whereby AI can completely transform not only user interfaces but allow for meaningful interpretation of the massive amounts of data people and businesses are accumulating. We’re hopeful that the companies entering the program will harness the combined resources of NYU and ffVC to amplify their growth and help shape the future of technology.”
The AI NexusLab will merge ffVC’s expertise in helping to build early-stage technology companies with lessons taken from the highly successful NYU network of incubators, which boasts a survival rate of nearly 90 percent for the companies that graduate from its program. This stands in sharp contrast to the typical failure rate of 80 to 90 percent for startup companies in general.
NYU Tandon and ffVC will recruit the top AI startups from around the world to come to New York City for the four-month program, which will begin in November 2016. ffVC plans to invest $100,000 into each company in exchange for a fixed percentage of equity. This funding will provide working capital for the companies and supports the operating costs of the program.
The AI NexusLab will differ from accelerators in significant ways:
- Only five startups will be accepted and mentored toward the goal of viability for each one; typically, an accelerator class comprises as many as 100 pre-seed-stage startups, and the vast majority fail to launch.
- AI NexusLab will provide access to university computing assets, including three supercomputers and ultra-speed broadband connection at the school’s Data Future Lab, formerly known as the NYU Varick Incubator, in lower Manhattan. More significantly, each startup will get access to dedicated AI experts from the university, and two full-time academic experts will be chosen to address the specific technical needs of the cohort.
- Each startup will be assigned a student fellow with expertise to fit the company’s needs, from marketing to AI.
- Each startup will get access to the same $400,000 worth of support services provided to NYU Tandon’s incubator entrepreneurs. These include legal and intellectual-property consulting by Lowenstein Sandler, Google cloud storage, and Amazon Web Services, among others. They will work in lower Manhattan alongside NYU Data Future Lab companies that are at a more mature state and participating in the two-year long incubation program.
- Each startup will get access to the same acceleration team services as all ffVC companies. In addition to access to senior ffVC mentors with experience in advising and helping build early-stage AI companies, each startup will receive support across all aspects of company-building, which will remain accessible beyond the end of the program.
- AI NexusLab will encompass four intensive months of technical support and personalized mentoring, compared to the more typical three months.
- AI NexusLab will provide both technological and marketing support; in contrast, most accelerators concentrate on one or the other.
- Few accelerators support a single technology; any that do concentrate typically choose a single industry.
- Unlike accelerators, AI NexusLab is being designed to build AI strength throughout the community. One example is a conference planned at the conclusion of the program, in April. It will delve into the technology, trends, and opportunities as well as provide a networking opportunity for AI technologists, entrepreneurs, funders, and academics.