AI drives investment growth in climate technology and safety tech

Recent reports highlight significant trends in artificial intelligence (AI) and its role in driving advances in climate technology and Safety Tech, underscoring the increasing importance of these sectors to businesses as they navigate contemporary challenges.

According to the 2024 Global State of Climate Tech report published by PwC, the United Kingdom emerged as a notable player in climate technology investment amid a global downturn. The report indicated that AI accounted for one-quarter of all green technology investments in the UK for the year. Over the past year, the UK saw a remarkable £4.5 billion invested in climate tech, reflecting a 24% increase year-on-year. Notably, investment in machine learning and AI surged dramatically by 128%, suggesting their central role as growth drivers in the sector. British firms currently represent 22% of all AI-related climate tech startup funding, which is a significant portion of the overall landscape.

The report’s analysis encompasses a broader view, dissecting private equity and venture capital flows across 12,000 startups and 52,000 individual deals, amounting to a staggering total of £475 billion. Of this, £2.4 billion originated from UK investors directed towards domestic climate technology investment, a development indicative of improving confidence in the UK’s capacity to lead in this area. Within the findings, sectors traditionally linked to high levels of emissions—such as industry and agriculture—demonstrated a lack of funding relative to their emissions output, with industry contributing to 34% of emissions while securing only 8% of funding.

Dan Dowling, a Sustainability Partner at PwC UK, remarked on the increasing interest from private investors in adaptation and resilience technologies due to the immediate impacts of climate change, including extreme weather events. He noted the imperative for additional funding in high-emission sectors, saying, “While this trend is promising, more investment is also needed in high-emissions sectors like industry, agriculture, and the built environment.” He continued to point out that as the economy recovers, there will be opportunities for early-stage investors in transformative industries to make significant contributions toward achieving net-zero emissions.

In a parallel development, the Safety Tech industry, which focuses on online safety solutions, has also reported robust growth. A recent release from Paladin Capital Group outlined that global investment in Safety Tech reached $6.3 billion, reflecting a 14% year-on-year increase in the number of providers within the sector. This suggests that, despite broader investment downturns, there remains a strong momentum in technologies designed to protect users in the increasingly digital landscape.

Dr. Mary Aiken, Chief Scientist at Paladin and noted cyberpsychologist, provided context to the findings, indicating the necessity for Safety Tech solutions amid rising threats from disinformation and illegal online activities. “With threat actors increasingly spreading disinformation, extremism, and illegal content, and exploiting AI in, for example, the generation of deepfakes, it is encouraging that this report shows the global Safety Tech sector is steadily growing and expanding to a host of new countries.” She highlighted the potential of leveraging advanced technologies to create a safer online environment.

The report revealed that 63% of Safety Tech providers have attracted external investments, signifying an ongoing demand for funding in this area. Nevertheless, the sector faces challenges, particularly regarding access to quality training data essential for AI functionalities. Additionally, recent legislation in various countries is prompting a cautious approach among digital platforms as they adapt to new regulatory frameworks.

Alex de Carvalho, CEO and Co-Founder of PUBLIC, remarked on the unprecedented growth of the Safety Tech sector facilitated by generative AI tools and improved data sharing, positioning the industry at a pivotal moment where the integration of innovative technology can prioritise user safety.

Chris Inglis, a Senior Strategic Advisor at Paladin Capital Group, expressed concern that with the increasing online presence of individuals, there is a pressing need for a collaborative effort to enhance online safety measures. He argued for the establishment of a new ‘social contract’ for cyberspace to foster shared responsibility.

The ongoing developments in both climate technology, driven significantly by AI, and the Safety Tech sector highlight the dynamic shifts occurring in the digital and environmental domains that businesses are now navigating.

Source: Noah Wire Services