Energy sector investments in big data and artificial intelligence have ballooned by a factor of 10 this year, according to a new report on the sector.
The study, by accountancy firm BDO, found mergers and acquisitions involving energy companies and AI startups had soared in average value from around $500 million in the first quarter of 2017 to $3.5 billion in the second quarter.
The number of deals also went up, rising from six to eight. The 14 deals in the first half of this year compared to 15 in the whole of 2016. “We are witnessing the early stages of what will become an M&A trend for years to come,” said BDO.
The firm attributed much of this activity to the need for improved analytics to manage intermittent renewable generation.
“In these uncertain times, energy businesses adapt their strategy and look too artificial intelligence and big data to improve energy forecasts,” states the report.
As an example, in July, an energy sector consulting firm called Willdan Group paid $30 million for Integral Analytics, a data analytics and software company.