In a surprising turn, AI startups have defied predictions of a funding slowdown for 2024, setting a new record with $33 billion raised in the first half of the year. This marks the highest H1 figure in the market’s history, according to data from Stocklytics.com.
Nearing 2023’s Total in Just Six Months
Following the Nvidia boom, AI startups have become a magnet for venture capital, attracting significantly more investment than other sectors. Crunchbase data reveals that over the past three years, AI companies have secured more than $150 billion in funding, with 2021 previously holding the record at $48 billion.
In 2022, VC investments in AI amounted to $32.7 billion, increasing to $37.2 billion in 2023. This year, 2024, is on track to set a new record, with nearly 90% of last year’s total raised in just the first six months.
Q2 Surge Drives Historic Funding
The first quarter of 2024 saw $8.2 billion invested in AI startups, nearly 80% more than the $4.6 billion invested during the same period last year. However, this figure pales in comparison to the second quarter, where VC funding skyrocketed by 240% year-over-year to an unprecedented $24.8 billion. This surge brought the total H1 funding to $33 billion, a 177% increase from the same period in 2023.
Interestingly, while the total funding amount has surged, the number of investments has decreased, indicating that AI startups are securing larger amounts of capital in fewer funding rounds. Crunchbase data shows 516 VC investments in AI startups in the first half of 2024, down from 569 in the same period last year.
Total AI Funding Reaches $214 Billion
With the latest influx of $33 billion, the cumulative funding for AI startups has reached nearly $214 billion. The United States leads this trend, accounting for over 60% of the total with $130.3 billion, and California being the primary driver. Asian AI startups follow with $48.5 billion, and European companies close behind at $27.4 billion.
Machine learning startups have attracted the most funding, totaling $110.6 billion to date. AI software startups and information technology startups follow with $73.2 billion and $53.1 billion, respectively.
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