Do they just jump on every bandwagon in the hope that one of them might pan out?
VCs raise money from fund managers (sovereign wealth funds for example) who also present a thesis to their stakeholders for how the money will be managed.
Depends on the timing but I think VC focus on ML is a good indicator of where smart money thinks the money is going to be made. But there are a lot of people that catch a trend in the tail in, I don’t think we’ve gotten anywhere close to that for ML investments.
But in this particular case, it was a corporate VC, investing their own money.
(I'm working on a startup right now that's in a similar position - non-hyped B2B segment. VCs are all "hey, look, we don't understand X market very well, maybe go to Y VC?" And Y VC is all "hmm, you're only tangentially related to Z market that we actually understand, so you'll need to get to Series A-sized revenues before we'll put in a seed-size investment.")
What has AI really given us so far? Amazon / Youtube recommendations and some self driving cars that have crashed in unexpected ways. (Have they managed to debug that yet?)
But their manager told them ML, ML, so they need to invest in ML. This is not a joke.
But it's so much damn data so loosely coupled to a company's actual product that trying to get any actionable intelligence out of it is basically impossible. Enter ML. "Just" chuck your data at a NN use A/B tests to train and hope the company ends up with higher revenues, if they do: claim the 'data scientists' are definitely a profit center; if they don't: claim you need more data.
Until Exxon-Mobile stops storing metrics on how many goldfish I own in a given month, cranking out ML related companies seems like a good bet for VCs because it's not going to get any easier to turn progressively more esoteric data points into money.
Disqualify the easy "no", then everything else is a "maybe". Invest and move on.
Whether it is true or not in this case they may have perceived that if it was based on a ML approach it might be harder for the competition to replicate if it was successful.