Article based on on interview with Petr Šrámek – Lupa.cz, 5.3.2018, Author: Jan Sedlák

In the first phase, the AI Startup Incubator wants to support 25 companies and has USD 10 million available for two years.

This May, a project in Prague will be launched with the goal of making the Czech Republic one of the centers of development of artificial intelligence (AI). It is called the AI Startup Incubator and in the first phase it will distribute up to USD 10 million over two years to start-ups in this field. After the two-year period ends, another round should be launched.

“We want to react to the somewhat dismal situation in the Czech Republic and in the entire Eastern European region. In Canada, the United States, Israel and China, many activities related to artificial intelligence have begun, and the world is getting faster in this area. There is AI potential in our country, but there are hardly any young companies seizing this potential,” Petr Šrámek, one of the founders and the director of the AI incubator, tells Lupa.

The AI incubator should not be a conventional start-up accelerator. “We won’t be accelerating, as there’s nothing to accelerate,” continues Šrámek. “We need to create companies focused on applied artificial intelligence here. At the end of the program, the firms must have a functional version of their product (MVP), an assembled team, and a customer.”

From computer vision to AR

The program’s range will be wide and applies to many areas dealing with AI: computer vision, augmented reality (AR), virtual assistants, natural-language processing (NLP), translations, gesture control, emotion recognition, chatbots, and process automation. For the time being, the highest number of interested entities is dealing with healthcare and education.

The activities do not only focus on local teams; the goal is to get projects from abroad as well. At the moment, they constitute the majority anyway. So far, approximately 90 teams have shown interest in entering the Prague incubator, with less than one-third of them from the Czech Republic.

This month, a pilot operation with two selected projects will begin, and full operation should commence in May. Each quarter, the AI incubator wants to add around five new projects. They are selected based on a six-round procedure that takes three months.

Šrámek is now gradually finalizing a group of domestic and foreign investors to invest in start-ups focused on artificial intelligence. The names of some of them will be published only later; the list will be finalized this April.

Up to 600,000 per team

The objective is to support 25 companies in the first two-year period. Each of them will get the necessary backing for one year, such as offices and the like, connections to foreign partners and companies, and also between 150,000 and 600,000 dollars in financing. The investments will be in the form of convertible loans. In the beginning, the investors will not be taking any profits, and this can be converted into financing for the next investment round.

It hasn’t been finally decided where the AI Startup Incubator will have its seat. It is currently in Jižní Město at Opatov Park where Šrámek runs one of the IT companies he started (and even sold) during his career.

Currently, the AI incubator has a team of eight in-house people and collaborators for each area. The co-founder of the project is Daniel Kunz, an investor who was in charge of Tech Data, an important IT distributor, for six years.

Two people are in charge of the technical part. Until recently, Jan Romportl was O2 Czech Republic’s chief data scientist, while Martin Dostál continues to research human-machine interactions at the Brno headquarters of Honeywell.

The consultants include Jan Zadák, until recently one of the highest global managers at Hewlett Packard Enterprise and today an investor, and Jiří Materna, former head of research at Seznam. The AI incubator is also collaborating with a host of mentors from the field.

There are already projects here

Several projects related to artificial intelligence have already been functioning in the Czech Republic. There is the CEAI in Prague and Brno, which creates AI start-ups focused mainly on enterprise software.

Many activities are the work of Michal Pěchouček. He is a co-founder of Cognitive Security, which was purchased by Cisco and based on that started a development center in Prague focused on AI in cybernetic security. Pěchouček also founded the Artificial Intelligence Center at the Czech Technological University (CTU) in Prague and co-founded Blindspot Solutions, which applies machine learning in companies. The Adastra Group has recently acquired a 50% share in Blindspot Solutions.

The Karlín-based GoodAI, founded by Marek Rosa, also focuses on research into artificial intelligence. It tries to create general AI and implements AI elements in companies through GoodAI Applied. Among the start-ups, Neuron Soundware, which recognizes machine failures, is interesting. A CTU team with its Alquist bot finished second in the global Alexa Prize contest organized by Amazon.

AI and machine learning are used by a host of other firms. Among large corporations, a development group at IBM in Prague has been working on language recognition for many years within the framework of the Watson system.

Jan Kleindienst from this team and Petr Šrámek from the AI incubator also founded a section for artificial intelligence within the Confederation of Industry. The first foreign companies focusing purely on AI are looking for a path to Prague. For instance, the U.S. company H2O.ai is starting development activities here.