Today’s enterprise capital funding is well below the record levels reached three years ago. But of course, the comparison can be much starker were it not for AI.
So far this 12 months, 35% of U.S. startup investment has gone to AI-related firms, in keeping with Crunchbase data. That looks like the highest percentage on record, surpassing even 2023, when OpenAI secured his $10 billion Microsoft-financing supported.
For comparison, here is the percentage of funding going to AI firms over the past five years:
The largest funding rounds for AI firms in 2024
Much of the big funding for AI firms has come from a handful of very large rounds. So far in 2024, five such firms have raised rounds of $1 billion or more, led by a $6 billion round in May B-Series Down xAI.
They are not all pure AI games
It is value noting that a good portion of funding in the AI category comes from firms with various degrees of involvement in the technology.
Broadly speaking, startups in this sector could be divided into those who leverage AI in a specific industry or use case, and those who advance core technologies.
The core technology category includes generative AI giants like OpenAI and Anthropicthat develop the underlying technology. Other firms, in turn, can apply their AI models to make use of cases across countless industries.
The second category includes more startups, but typically not the most heavily funded. Some of the larger recipients of 2024 investments in this vein include: Abnormal securityfocusing on email security, Flyingwhich is working on automated decision-making for the airline and travel industries, and a healthcare startup Restrictwhich applies artificial intelligence to clinical documentation.
We will monitor the situation in the coming quarters to see whether the share of AI financing stays high and whether the structure of investment recipients has modified.