AI startups set a new record with $33 billion raised in the first half of the year, marking the highest fundraising total in the market’s history.
Contrary to earlier forecasts of a slowdown in AI funding for 2024, the reality is quite different. AI startups are not only smashing records but doing so at an accelerated rate, raising unprecedented amounts of capital.
According to data from Stocklytics.com, AI startups have achieved an exceptional milestone, raising an astounding $33 billion in the first half of 2024, marking the highest H1 figure in the market’s history.
Since the Nvidia surge, AI startups have captured significant attention from VC investors, attracting substantially more fresh capital compared to most other sectors. Crunchbase data reveals that companies and startups in this sector have amassed over $150 billion in funding over the past three years, with 2021 standing as the record-breaking year.
In 2021 alone, VC investors injected more than $48 billion into the market, setting a historic benchmark. Statistics indicate that 2022 saw $32.7 billion in VC investments, which surged to $37.2 billion last year. However, 2024 appears poised to set a new record, with AI startups nearly matching or exceeding the total funds raised in all of 2023 within just six months.
The first quarter saw $8.2 billion invested in venture-backed AI startups, nearly 80% more than in the same period a year ago, which saw $4.6 billion worth of investments. While $8.2 billion of fresh capital is quite an impressive figure, that is nothing compared to money raised in the second quarter of the year. In Q2, VC funding activity skyrocketed by 240% year-over-year to $24.8 billion, the highest quarterly figure in the market’s history.
With $24.8 billion raised in Q1, the total H1 funding amount jumped to an impressive $33 billion, 177% more than in the same period a year ago and the highest H1 figure ever.
Interestingly, while the total funding amount increased, the number of investments dropped, showing that AI startups managed to raise more fresh capital in fewer funding rounds. The Crunchbase data show that AI startups saw 516 VC investments in the six months of 2024, down from 569 in the same period of 2023.
AI Startups` Total Funding Hits $214 Billion
With $33 billion raised in funding rounds during the year’s first half, the cumulative funding amount has jumped to almost $214 billion. More than 60% of the total funding, or $130.3 billion, has been directed to companies in the United States, with California leading the charge, proving the US leadership in the AI industry.
Asian AI startups raised the second-highest value in funding rounds, or $48.5 billion, with European companies not far behind at $27.4 billion. Statistics also show that machine learning startups have raised the most money in funding rounds, or $110.6 billion so far. AI software and information technology startups follow, with $73.2 billion and $53.1 billion, respectively.