AI startups experienced a remarkable surge in funding last year, raising $110 billion, a 62% increase from the previous year, according to Dealroom's latest figures. This growth starkly contrasts with the broader tech industry, where privately-backed companies raised $227 billion in 2024, marking a 12% decline from the previous year's figures. The data highlights a significant shift in investment focus towards artificial intelligence, even as other tech sectors face challenges.
In the United States, AI startups accounted for 42% of the venture capital raised in 2024, totaling $80.7 billion. Europe saw AI startups attract 25% of the region's venture capital, raising $12.8 billion, while across the rest of the world, AI startups secured 18% of venture capital investments. China emerged as a standout player in AI funding, with investments reaching $7.6 billion last year.
Notably, several AI companies stood out as top fundraisers. Databricks led the pack with $10 billion in funding, while OpenAI secured $6.6 billion. Other significant fundraisers included Anthropic, Waymo, Anduril, xAI, and Vantage. GenAI companies collectively raised $47.4 billion in 2024, underscoring the sector's growing appeal to investors.
Antler emerged as the most active investor in AI last year, followed by prominent firms such as a16z, General Catalyst, Sequoia, and Khosla Ventures. These investors played a pivotal role in driving the AI funding boom and shaping the industry's future direction.
Foundational AI technology outpaced AI applications regarding growth and funding allocation over the past two years. This shift indicates a heightened focus on building robust technological infrastructure to support diverse AI applications. Notably, 12% of AI venture capital funding last year went to startups dedicated to developing open-source AI solutions.
“However, there is considerable grey area for what is considered open source or not,” – Orla Browne
The Dealroom report was commissioned to coincide with a week of AI events in Paris, aligning with the French government's AI Action Summit. The events aim to foster dialogue and collaboration among key stakeholders in the AI landscape.
Yoram Wijngaarde, founder of Dealroom and an industry veteran, emphasized the unprecedented scale of AI investments:
“This is the biggest wave ever by absolute amounts invested,” – Yoram Wijngaarde
He also noted Europe's unique position within the global AI ecosystem:
“In Europe we have a bit of an innovators’ dilemma,” – Wijngaarde
The report highlights a growing interest in foundational AI technology, which has attracted significant funding due to its potential to revolutionize various industries. As AI continues to advance rapidly, investors are increasingly drawn to its transformative capabilities and the promise it holds for the future.
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