Venture capital funding in the U.S. has surged this 12 months amid the artificial intelligence investment boom. However, not all regions shared the profits equally.
Among the top states for startup funding, California saw by far the largest increase in total investment. Others – including Colorado, New Jersey and New York – also saw gains this 12 months, in response to a Crunchbase evaluation of startup funding by state.
However, some of the large enterprise centers are not operational. Massachusetts stands out here, where startups earned just over $10.7 billion in 2024, significantly lower than last 12 months.
To get a broader picture, below are the total funding amounts for the eight states that contributed at least $2 billion in enterprise funding this 12 months.
Profits go to states where heavily funded generative AI startups are situated
There are, in fact, many complex aspects that determine why startup investment wealth may rise or fall in a particular state or metro area. However, in 2024, there was also a easy explanation for the funding pattern: generative artificial intelligence.
Much of the 12 months’s biggest rounds went to several AI firms working on large language models and technologies that enable them to scale. And it just so happens that these startups are heavily concentrated in Northern California.
Most of them are familiar names: OpenAI, xAI, Anthropic, Secure superintelligence AND AI scales this 12 months they have raised a total of over $15 billion. All are based in the San Francisco Bay Area.
Other states with investor-preferred AI firms also gained in the rankings. For example, funding for New Jersey startups is already up 37% year-over-year, largely driven by the AI cloud infrastructure company CoreWeavewhich raised $1.1 billion C series in May.
Massachusetts and Texas are seeing declines
Then there’s Massachusetts. While Boston’s startup scene is renowned for its biotech and deeptech talent, the city lags behind other centers in creating highly valued AI unicorns.
This may explain why, so far this 12 months, total startup funding in Massachusetts is down about 23% in comparison with the amount in 2023. While we must always see some catching up in the final weeks of the 12 months, it could still be considered a down 12 months.
This is not necessarily a worrying indicator. While no Massachusetts firms raised rounds of $1 billion or more this 12 months, at least 30 of them were valued at $100 million or more. This includes $405 million F series for a battery technology company Energy Form and $400 million A series for the creator of an anti-obesity drug Kailera Terapeutyczna.
Texas is also shaping as much as be a good 12 months, with about $4.8 billion going to startups in the Lone Star State in 2024 in comparison with $6.2 billion for all of 2023. Again there is time to catch up, but the possibilities of doing so are relatively slim at this time of 12 months.
While there have been no capital rounds of $1 billion or more for Texas startups, at least seven have accomplished financing of $100 million or more this 12 months. The largest involved $244 million D series for a Houston-based geothermal energy startup Fervo Energy and $232 million C series for an Austin-based endpoint security provider NinjaOne.
Washington, with just over $2.5 billion in funding so far, also appears to be on track for a year-over-year decline. The largest rounds this 12 months include $144 million B series for the creator of cell therapies Get ahead of biology and $140 million C series to trigger security Chain guard.
In other states, funding looked flatter
In three other states – New York, North Carolina and Florida – funding looked flatter.
New York actually improved somewhat, helped by a $1 billion late-stage round for a cybersecurity provider Wizard. Meanwhile, Florida dropped barely, likely because of the lack of mega-grand rounds for cryptocurrency and Web3 firms this 12 months.
Then there’s North Carolina, which, based on its results, looks prefer it had an up 12 months. However, most of the amount got here from one round: $1.5 billion Disney investment in the 33-year-old Epic gameswhich is still private but too old to suit into the startup category. Without this agreement, financing would remain unchanged.
The most significant conclusion: it is tough to create a latest technology center
One of the overarching conclusions we will draw from this 12 months’s state funding data is that while we may feel enormous enthusiasm for emerging startup hubs, displacing Silicon Valley will take greater than just excitement.
Northern California’s combination of high-tech talent, strong embedded networks, deep capital resources and powerful universities stays unmatched in its ability to scale transformational startups. This is definitely still where investors spend the most of their money.