AI Startups Raised Record Quarterly Capital in 2024
10 Oct, 2024 ● Crypto News
Despite an overall decline in venture capital (VC) funding, artificial intelligence (AI) startups continued to attract significant investment during the past quarter.
Data from analytics firm Stocklytics shows that AI startups secured $11.8 billion in funding over the last 90 days, representing 30% of total VC funding in the third quarter of 2024.
This surge happened despite challenges such as increased U.S. export restrictions on AI chips, uncertainties surrounding startup valuations, and earlier disappointing earnings reports, creating a mixed environment for investors.
The analysis indicates that while investors are becoming more selective in choosing AI startups to support, their interest in the sector remains strong.
“The $11.8 billion in fresh capital is close to the quarterly figures seen throughout 2023 and 2024, excluding the record-breaking $29.6 billion raised in Q2 2024,” said Stocklytics analyst Neil Roarty.
Although deal activity declined, with the total number of transactions dropping 28% year-over-year to 79 deals in the third quarter (down from 110 in the same period of 2023), Roarty noted that larger deals have kept investor sentiment positive.
Overall VC funding also decreased by 13% year-over-year.
Crunchbase data reveals that investors have poured nearly $53 billion into the AI sector so far this year, marking a 35% increase compared to the first three quarters of 2023.
Noteworthy deals include OpenAI's recent $6.6 billion funding round, which valued the company at $157 billion.
With the latest quarterly figures, total AI sector funding has surpassed $241 billion, with U.S. companies raising almost 65% of that amount, or $155 billion.
In contrast, AI startups in Asia have secured $53 billion, while European firms have raised $30.2 billion.
A key strategy for venture capitalists has been betting on the convergence of AI and blockchain technologies.
“I am particularly excited about opportunities at the convergence of AI and crypto, although even that distinction will sound dated in a few years,” Pantera Capital portfolio manager Cosmo Jiang shared in a previous interview with Cointelegraph.
On Oct. 9, investment manager VanEck announced a new venture fund aimed at AI and crypto startups, offering $30 million for pre-seed and seed-stage companies.
Sources:
https://cointelegraph.com/news/ai-startups-record-funding-q3-2024
