While many of us took some day off over the holidays, AI startups didn’t take a break from fundraising.
The fourth quarter was like no other in the industry when it got here to fundraising. It wasn’t just that either Data cubes (although yes, a massive $10 billion round drives up the numbers).
At the starting of October OpenAI announced a long-awaited raise of $6.6 billion at a post-money valuation of $157 billion led by Develop capital.
Next month xAI raised one other $6 billion in a financing round, valuing it at $50 billion, Wall Street Journal reported. The recent round includes investments from Qatar Investment Authority, Valor Equity Partners, Andreessen Horowitz AND Capital of Sequoia.
Finally, also in November, Amazon agreed to take a position one other $4 billion in the AI startup Anthropic — giving the Seattle-based e-commerce and cloud titan a minority stake.
These agreements are concluded Logical monitorthe round is $800 million and TensorrentThe nearly $700 million in Series D funding seems quaint in comparison.
In total, greater than $42 billion was invested in AI startups in the fourth quarter, in line with Crunchbase data. That’s almost double the money invested in the third quarter of 2024, which was a record at the time. It was also roughly 3.5 times the amount invested in Q4 2023.
Offers down
Perhaps not surprisingly, given all the massive rounds that have inflated the dollar, deal flow has actually declined. In the fourth quarter, just one,100 financing agreements for artificial intelligence startups were finalized. This is down from 1,301 rounds announced in the third quarter and 1,338 rounds announced in the same quarter of 2023.
While the decline in deal volume is not shocking considering the over $26 billion invested in 4 rounds alone, it is a notable decline of about 15% in comparison with previous quarters.
Nevertheless, in line with our Global Venture Funding report, almost one-third of all global enterprise funding went to firms operating in AI-related fields, as funding for AI-related firms reached over $100 billion. Investors’ insatiable appetite for all things AI clearly didn’t wane last yr, let alone in the fourth quarter, when it went completely off the rails.
In any case, the AI investment frenzy continues. Investors should keep this in mind when considering whether to write down their next big check.