AI startup funding nearing 2023 total in just six months
Contrary to predictions of a slowdown in AI funding for 2024, the sector is experiencing a surge. AI startups are not only breaking records but doing so at an unprecedented pace, raising more capital than ever before.
Data from Stocklytics.com reveals that AI startups secured an astonishing $33 billion in the first half of 2024, marking the highest H1 figure in the market's history. This sum represents nearly 90% of the total amount raised in 2023, achieved in just six months.
Since the NVIDIA boom, AI startups have captivated VC investors, drawing significantly more capital than most other sectors. Crunchbase data indicates that AI companies and startups have raised over $150 billion in funding over the past three years. The record year was 2021, with over $48 billion in VC investments. In 2022, the figure was $32.7 billion, rising to $37.2 billion in 2023. The first half of 2024, however, suggests a new record may be set, with AI startups nearly surpassing 2023's total in just six months.
In the first quarter of 2024, AI startups attracted $8.2 billion in VC investments, an increase of nearly 80% from the $4.6 billion raised in the same period the previous year. The second quarter saw an even more dramatic rise, with VC funding activity soaring by 240% year-over-year to $24.8 billion, the highest quarterly amount on record.
With $24.8 billion raised in Q2, the total for the first half of the year reached an impressive $33 billion, 177% higher than the same period in 2023, and setting a new H1 record. Interestingly, while the total funding amount increased, the number of investments decreased, indicating that AI startups raised more capital in fewer rounds. Crunchbase data shows 516 VC investments in the first six months of 2024, down from 569 in the same period of 2023.
Total funding for AI startups has now reached $214 billion. Over 60% of this, or $130.3 billion, has gone to companies in the United States, with California leading the charge, underscoring US leadership in the AI industry. Asian AI startups secured $48.5 billion, and European companies raised $27.4 billion. Machine learning startups attracted the most funding, with $110.6 billion, followed by AI software and information technology startups with $73.2 billion and $53.1 billion, respectively.
