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Element AI drops out of robotics research-funding group to focus on commercialization

Element AI CEO Jean-François Gagné speaks at C2 Montréal in May 2018. Element AI | Twitter
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Element AI has dropped out of Canada’s only national-scale robotics research-funding organization, a sign of the Montreal-based company’s renewed focus on commercializing its artificial intelligence software products.

In October 2019, Element told the NSERC Canadian Robotics Network (NCRN) of its plans to drop out of the network that month. Its relationship with the network will end in April. “The precise rationale for Element AI’s decision is a matter of their corporate strategy and choices regarding priorities, coupled with financial considerations,” said NCRN acting scientific director Inna Sharf.

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Talking Point

In 2018, Element AI was one of 12 founding partners of the NSERC Canadian Robotics Network (NCRN), the country’s lone robotics research funding body. The Montreal-based company has since ceased its membership in the NCRN as it renews its focus on commercialization and getting its products to market.

Established in 2018 at McGill University, the NCRN focuses on robotics technology with significant commercialization potential. Element is one of the NCRN’s nine industrial partners; the Canadian Space Agency, Defence Research and Development Canada and the National Research Council are governmental partners. Neither Element nor the NCRN would say how much the company paid in yearly membership fees.

“As our business priorities have evolved and our focus is on delivering revenue-generating software products to market, we felt it more appropriate to withdraw out of respect for the NCRN’s objectives and the work conducted by its participants. While we embrace open collaboration for fundamental research, we will not formally collaborate with the NCRN,” said Philippe Beaudoin, Element’s co-founder and senior vice-president of research.

Not yet four years old, Element is a darling of Montreal’s robust AI sphere, with an estimated valuation of between US$600 million and US$700 million and a combined US$257 million in funding from investors including the Caisse de dépôt et placement du Québec, McKinsey & Company and the Quebec government. But it has also faced dwindling staff, stagnant revenues and struggles to get products to market. The company has announced “strategic partnerships” with several companies, though without disclosing financial details. “Element is under serious pressure to produce for their investors and [is] cutting inessential expenses,” said Alan Mackworth, a computer science professor at the University of British Columbia and founding director of its Laboratory for Computational Intelligence.

Indeed, when Element closed its last $200-million round in September 2019, the company and its investors said the funding was intended “to transform Element AI into a company with a commercial focus” and “accelerate the deployment and commercialization of solutions that meet customer needs.” 

The company has been heavily involved in robotics in the past. In 2017, it created a US$45-million joint fund with Hyundai, SK Telecom and Hanwha to develop “autonomous vehicles, household robots, manufacturing, drones and hardware.” Last summer, Beaudoin co-chaired the Montreal Robotics and Machine Learning Summit, which the company funded and hosted at its headquarters. 

The company has a robotics team staffed with what a spokesperson called “a handful” of researchers. Robotics team leader Anqi Xu didn’t respond to The Logic’s request for comment.

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Connections remain between Element and the NCRN, even though the two have parted ways. Joelle Pineau, a recipient of a 2019 Governor General’s Innovation Award for her work in AI and machine learning, is both an NCRN principal investigator and an Element AI fellow.

Element’s departure from the NCRN likely won’t hurt the institution, its scientific director said. “I don’t want to undervalue Element because they’re good people, but I think the effect will be minimal,” said Gregory Dudek. “It’s a shame, because we’d like to work with them, but the network will keep going.”

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