AI Domination! Nearly Half of U.S. Venture Capital Funding Flows to AI Startups in 2024
1min read According to the latest report from PitchBook, a U.S. venture capital data research firm, global startup companies received a slight increase in venture capital funding in 2024, with a significant rise in the proportion of funding going to artificial intelligence startups, especially in the United States, where this proportion has reached nearly half.
Global Funding Slightly Increased
In 2024, the global venture capital investment in startups increased to $368.5 billion, up 5.4% from $349.4 billion in the previous year. However, the number of global venture capital deals decreased by 17% from 43,320 in 2023 to 35,686 in 2024.
Overall, the percentage of AI deals in all venture capital transactions significantly increased in 2024: AI and machine learning startups accounted for 35.7% of the global startup funding, up from 24.7% in 2023; the number of deals accounted for 23.4% of the global total, up from 20% in 2023.
Kyle Stanford, Chief Venture Capital Analyst at PitchBook, said that this amount was indeed influenced by billions of dollars in funding received by well-known companies such as OpenAI and xAI, but the most important factor is the level of capital availability for AI compared to other industries.
He said that as large companies and investors take action to bet on the next wave of technology, the proportion of funding for AI companies has been continuously rising in recent years.
Nearly Half of U.S. Venture Capital Funds Flow to AI Companies
Looking at different regions, U.S. startups were the hottest in terms of venture capital financing transactions last year: U.S. startups received $209 billion in venture capital financing in 2024, an increase of about 30% year-on-year.
In contrast, the situation for startups and venture capital in other regions of the world is much more difficult: the financing amount for European startups decreased from $66.7 billion in 2023 to $61.6 billion in 2024, and the financing amount for Asian startups decreased from $100.1 billion in 2023 to $75.9 billion.
In 2024, U.S. AI startups received about $97 billion in venture capital financing, setting a new record. Among them, the most eye-catching were the billions of dollars in huge investments received by AI companies such as xAI, OpenAI, and Anthropic.
The data shows that nearly half of the $209 billion in financing raised by all U.S. startups last year flowed to AI-related companies, which is the highest proportion on record.
However, while AI startups are receiving more funding, many once-popular but now outdated industries, such as enterprise software, are facing difficulties in financing. This also reflects a long-term trend in the transformation of the technology industry in the post-pandemic era.
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