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Investors pull back on artificial intelligence

AI-focused digital health funding
Data: CB Insights; Chart: Thomas Oide/Axios

Funding for AI-focused health startups fell 32% in Q1 2022, after nine straight quarters of steady growth, according to a fresh analysis from CB Insights.

Why it matters: Although often excessively hyped, AI has huge potential to boost patient outcomes, curb hospital spending and even pinpoint diseases earlier.

  • Even taking this quarter's dip into account, health AI funding remained at higher levels than those seen before 2021.

Context: Health tech companies aren't the only ones seeing decreases in interest around AI — global funding for all kinds of AI startups fell 12% last quarter to $15.1 billion, down from $17.1 billion in Q4 2021.

  • Health AI accounted for 17% of the Q1 2021 total, representing the largest sub-sector.

By the numbers: The health tech dip can be explained in part by a curb in mega-round deals for AI-focused health companies, CB Insights analysts say.

  • Last quarter, 12 AI-focused health companies raised rounds exceeding $100 million. This quarter, that number fell to seven.

Those numbers also line up with last quarter's overall drop in funding for the digital health sector.

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