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Artificial Intelligence (AI) is experiencing growing adoption in the business world. According to the consulting firm IDC, global investment in technology reached $500 billion this year. Projections indicate that by 2030, AI will contribute to a 5% increase in Latin America’s Gross Domestic Product (GDP).
Brazil is a regional leader in AI development and innovation in Latin America, concentrating 73.65% of total startups and investment volume. In the Amazonian country, AI-focused startups attracted R $2 billion in investments in 2022, marking a 50% increase compared to the previous year.
Colombia and Mexico share a representation of 6.64% each in the AI startup ecosystem within the region. Chile contributes 5.60%, Argentina 3.73%, and Peru, Uruguay, Costa Rica, and Ecuador contribute just over 3% of the total.
Eduardo Fuentes, Chief Research Officer at Distrito, comments on these data:
“These numbers reflect a promising scenario, but more investments and initiatives are still needed to encourage innovation and technological development. This indicates considerable room for growth and consolidation in these markets.”
Distrito is a Brazilian business transformation platform that enhances startup outcomes through emerging technologies. In five years, they have built the most advanced data intelligence system, mapping the performance of 40,000 startups in Latin America producing unique knowledge about the impact of technologies and new business models.
AI Growth in LatAm
The scene of AI startups in Latin America has experienced substantial growth in recent years. Between 2010 and 2015, the number of new companies founded annually was less than 10. From 2016, there was a significant jump, with 52 companies founded, followed by a peak of 93 in 2017. Subsequently, the founding of companies in the sector slowed, reaching 81 in 2018, 57 in 2019, 39 in 2020, and a sharp drop to 8 in 2021.
Fuentes highlights that this reduction does not necessarily reflect a decrease in interest in starting a business with this technology but rather a more incredible difficulty in identifying and mapping startups still in the early stages of development. He notes that many AI innovations are emerging in research labs or early-stage startups.
Despite the challenge of identifying early-stage startups, the AI market in Latin America continues to grow and mature. Advances in AI have the potential to generate global revenues of $13 trillion by 2030, driving a 5% increase in the GDP of the Latin American region.
Latin America is beginning to position itself as a region open to exploring AI development and use. In different countries such as Mexico, Colombia, or Chile, to name a few, there are study centers and training initiatives that respond to current market demands regarding Artificial Intelligence. Additionally, according to a survey published by Statista, countries like Mexico, Peru, Colombia, and Chile have high acceptance of AI use among their inhabitants, making it an immensely valuable and interesting market for such technologies.
