According to the latest data from the analysis company Dealroom, funding for artificial intelligence (AI) startups reached $110 billion in 2024, marking a 62% increase from last year. In contrast, the overall funding situation in the technology sector has been less favorable, with private equity-backed companies (including startups and growth-stage companies) totaling $227 billion, a 12% decrease compared to 2023.
Image Source Note: Image generated by AI, image licensed from Midjourney
Yoram Wijngaarde, founder of Dealroom, has decades of analytical and consulting experience in the tech industry. He pointed out that the impact of AI on investment is unprecedented, with almost no other field in the past being comparable. He stated, “This is the most significant wave of investment in absolute dollar amounts in history, like never before.”
The surge in funding is attributed to AI's influence on a broader ecosystem, encompassing various fields such as hardware, infrastructure, applications, and foundational models. Some of the largest AI funding cases in 2024, such as Anthropic (large language models, generative AI), Waymo (autonomous driving), Anduril (defense), xAI (applications), Databricks (data processing and management, especially AI data), and Vantage (data centers and infrastructure), reflect the investment appeal across different sectors.
Although OpenAI is highly representative in the AI field, its funding is not the highest. Databricks leads with $10 billion in funding, while OpenAI ranks second with $6.6 billion. Nevertheless, OpenAI remains a benchmark in the industry with over $20 billion in total funding and a popular application, ChatGPT.
Notably, generative AI companies secured $47.4 billion in investments in 2024, with the growth rate of foundational AI technology surpassing that of application areas, making it the largest segment of the funding pie.
According to Dealroom's data, 42% of venture capital (approximately $80.7 billion) flowed to AI startups in the United States, while Europe accounted for only 25% (about $12.8 billion), and other regions made up 18%. China stood out last year with an investment amount of $7.6 billion.
“In Europe, we face a dilemma of innovation,” Wijngaarde said, “We don’t want to replace what already exists, which may make our position relatively conservative.”
With the surge in funding for AI startups, the costs of building and operating these services have also increased accordingly. For example, large language models require significant computational infrastructure to build and operate. Projects like DeepSeek demonstrate alternatives that can be built at a lower cost ($50) that rival OpenAI's models, but whether this will see further development in the coming year remains uncertain.
Key Points:
- 🚀 In 2024, funding for AI startups reached $110 billion, a year-on-year increase of 62%.
- 🌍 Funding for AI startups in the U.S. accounted for 42%, while Europe only accounted for 25%.
- 📈 Generative AI companies received $47.4 billion in investments in 2024, with rapid growth in foundational AI technology.
