AI-first companies attracted $110bn of capital across the world in 2024, with the US raising over 16 times more investment in Generative AI than any other country, according to data from Dealroom.co.

This surge in investment represents a 62% year-on-year increase and contrasts starkly with a gloomy backdrop in the wider tech sector, which saw the rest of venture capital investment fall by 12%. Generative AI was a major driver of investment in 2024, with $47.4bn raised globally.

US leads on all venture capital funding

The US led the way in global investment into this milestone technology last year, committing $80.7bn of capital towards AI versus $7.6bn in China and $12.8bn across Europe. The US is even more dominant in Generative AI; 83% of global GenAI investment in the last five years has been raised by US startups, including OpenAI, Anthropic and xAI. Seven out of the top 10 funding rounds globally were AI companies, including Databricks, Anduril and G42.

The recent revelation that China’s DeepSeek has created a relatively low-cost LLM is put into perspective by figures which show that AI now accounts for a third of global venture capital, double the share of just two years ago. The US is also committing a greater share of total venture capital funding to AI – some 42% of US VC funding went into AI startups in 2024, versus a quarter in Europe. Outside the US and Europe, AI companies have attracted 18% of total VC funding.

Talent density in Europe

One area where Europe is punching above its weight is AI talent. The region has the highest concentration of AI experts per capita, exceeding the US and China. While Europe’s best-known foundational model, Mistral, was founded in Paris, the UK continues to lead AI funding in Europe, attracting $4.3bn in venture capital funding. This included the continent’s largest funding round, when autonomous driving company Wayve alone raised $1.1bn in May last year, compared with France’s $2.7bn and Germany’s $2.1bn. London also boasts the largest number of AI engineers in Europe, followed by Dublin and Zurich.

Global R&D spending

The US is also racing ahead of the rest of the world through its corporate R&D spend, which is heavily focused on AI. Total corporate R&D spend in the US was $596bn from tech and non-tech companies. In comparison, it was only $196bn in Europe, a mere third.

When it comes to tech R&D spend, the Mag 7 companies including Alphabet, Apple, Meta, Microsoft and Nvidia dominate investments, along with Intel, Broadcom, Qualcomm and Cisco, who spent $344bn collectively in 2024. This was 10 times more than Europe, where three tech companies – SAP, Nokia, and ASML – spent $35bn between them. This is another sign of US dominance in the AI race.

Robert Lacher, Founding Partner at Visionaries Club and host of Visionaries Unplugged: Dare to Ignite in Paris which follows the AI Action Summit, said: “Foundational models have absorbed the lion’s share of venture capital funding in 2024, but we believe investment in application layer businesses will skyrocket in 2025. If Europe’s leading AI clusters – London, Paris, Munich and Zurich – are to produce global category winners then ‘new economy’ founders must work with ‘old economy’ industrial businesses to solve real-world problems.”

James Wise, General Partner at Balderton Capital, said: “While US investment in AI still outstrips Europe's, the gap is closing and as the cost of inference and reasoning models it is talent and innovation that will define where these companies are built more than anything. With the talent and market demand here, we're confident 2025 will be another banner year for European AI and increasingly we will see a greater share of funding going into companies building applications on AI.”

Ziv Reichert, Partner at LocalGlobe, said: “We’re excited about AI’s potential to transform industries and supercharge knowledge workers. US investment in foundational models is hefty but Europe continues to have a talent advantage which presents a window of opportunity on which we must act. Founders across Europe are galvanised to build the biggest companies leading the next wave of innovation to transform industries and bring meaningful productivity gains which will have widespread benefits across society, particularly in areas like education, healthcare and the energy transition.”

The AI Action Summit is a two-day high-level summit gathering Heads of State and Government, leaders of international organisations, CEOs of small and large companies, representatives of academia, non-governmental organisations, artists and members of civil society. Taking place on the 11th and 12th February in Paris, the AI Summit will include discussions on Public Interest AI, the Future of Work, Innovation and Culture, Trust in AI, and Global AI Governance.