AI-related startup investments surged in the latter half of 2021 as remote work became a permanent fixture. The rise of Generative AI, which creates entirely new content, caught the attention of both startups and investors.
There was a 5% increase in AI funding in the first half of 2024 compared to 2022, leading to around 18 companies hitting unicorn status. Funding for AI-related startups surpassed $31 billion in the quarter of 2024, a 27% increase month-over-month from the $24.5 billion invested in December 2022.
As AI advances, major tech corporations and emerging vendors rapidly incorporate generative AI capabilities to cater to the growing demand. In this article, find out the latest statistics in AI funding and the trends in AI startups in 2024.
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- There are over 61,904 companies in Artificial Intelligence as of 2024.
- AI funding for startups surpassed $31 billion.
- Generative AI startups generated $14.1 billion in funding in Q2 2024.
- ChatGPT had over 1 million users within the first five days of being available.
- The global generative AI market will reach $42.6 billion in 2024.
- Open AI holds the highest AI funding, receiving over 10 billion from Microsoft.
How Much is the Total Funding of AI Startups Worldwide?
In 2024, AI startup funding exceeded $31 billion. Over $14.1 billion in equity funding was from 86 deals in Q2. This marks a significant change compared to 2021, when AI-related funding amounted to $42.76 billion.
Read on to see how much AI funding statistics in 2024 have evolved and the statistics for AI startup funding opportunities.
AI-Startup Funding Statistics
Around 30% of AI startups are based in the United States. Among them are five major companies that have raised the largest funding opportunity in 2024. They are:
Here are some fascinating statistics on AI funding opportunities in 2024:
1. There are over 61,904 companies in Artificial Intelligence as of 2024.
(Tracxn, Tracxn)
As of 2024, there are 61,904 AI companies worldwide, according to Tracxn. This shows a 6.8% increase compared to the 57,933 companies in 2022. Some of the notable businesses in the 2024 list are:
- Notion
- Stripe
- Freshworks
- Fortinet
- Seismic
- CrowdStrike
- Splunk
The rising number of AI companies highlights how various industries are starting to recognize the potential of AI. Businesses now use it to improve efficiency, automate processes, and gain insights from data.
2. OpenAI is the highest AI funding startup in 2024, recording over $10 billion from Microsoft.
(Crunchbase News)
ChatGPT, launched by OpenAI, became the symbol of a new and stronger wave of AI. Microsoft invested $10 billion in OpenAI in January 2024 for developing new products and funding AI model training.
Microsoft had already invested more than $3 billion in OpenAI. Investing more demonstrates the importance of OpenAI's technology to Microsoft and its competition with other big companies like Google and Meta.
| 🎉 Fun Fact: Tesla and SpaceX CEO Elon Musk is one of the co-founders of OpenAI. However, he stepped down from the board in 2018. Musk wanted to avoid any potential conflicts of interest as Tesla was also developing its own AI. In 2020, Musk criticized Microsoft’s $10 billion investment in OpenAI. He expressed concerns about the extent of control exerted by Microsoft compared to the autonomy of OpenAI's internal leadership. Check out the video below to learn more about what Elon Musk has to say: |
3. AI funding for startups surpassed $31 billion in 2024.
(Crunchbase News)
Funding for AI-related startups surpassed $31 billion in Q1 2024. This is a 50% drop from the $62 billion invested in January 2022. The decline was due to the slower pace and decreased deal volume in venture capital funding. Despite this drawback in funding, the AI sector has created a growth frenzy influencing many industries.
4. Generative AI startups generated $14.1 billion in funding in the second quarter of 2024.
(CB Insights)
Generative AI focuses on machines’ ability to create new content—from text and code to voice, images, videos, processes, and complex 3D structures.
Startups specializing in generative AI generated over $14.1 billion in equity funding across 86 deals in the second quarter of 2024. This surge in funding can largely be attributed to the success of OpenAI’s ChatGPT, which was launched in November 2022.
5. Venture funding in generative AI startups grew to $12.7 billion in the first five months of 2024.
(Pitchbook)
Venture funding in generative AI startups grew from $4.8 billion in 2022 to $12.7 billion in the first five months of 2024. About $1.7 billion was generated across 46 deals in the first quarter of 2024, and an additional $10.68 billion worth of deals announced in the quarter were yet to be completed.
Despite the pressure on venture capital in a challenging economic environment, there is a steady capital inflow into generative AI startups. Generative AI has gotten investors' attention with an increase in the number of pitches for generative AI startups in the past months.
| 💡 Did You Know? In 1956, the first venture funding for AI transpired at Dartmouth College. Math professor John McCarthy led a research project intending to study artificial intelligence. With him are Marvin Minsky, Nathaniel Rochester, and Claude Shannon. The group secured $7,000 in funding from the Rockefeller Foundation. Their simple workshop laid the groundwork for future AI research. |
6. ChatGPT had 1 million users within the first five days of being available.
(Forbes)
ChatGPT was developed in November 2022 by OpenAI, specializing in responding to users' questions and requests on particular topics. The user can refine the search query in response to what ChatGPT produces or ask follow-up questions to home on specific information.
It is estimated that more than 1 million people accessed ChatGPT in its first 5 days alone, and 2 months after its launch, it had attracted over 100 million monthly active users.
7. The global generative AI market will reach $41.6 billion in 2024.
(Pitchbook)
Businesses and venture capital firms are increasingly paying attention to the potential of generative AI applications, estimated to reach $42.6 billion in 2024, with natural language interfaces for customer service and sales automation. The generative AI industry is predicted to reach $98.1 billion by 2026, growing at a compound annual growth rate of 32%.
8. The AI global market is expected to grow annually at 37.7% from 2024 to 2030.
(Grandview Research)
The AI market is projected to reach $1,811.8 billion by 2030, a significant increase from its estimated $86.9 billion revenue in 2022. Grandview reported that as AI continues to transform various industries, an expected annual growth rate of 37.3% will reach about.
9. 37% of AI companies are based in the US.
(Builtin, Tracxn)
Of the 61,904 AI companies existing worldwide, 18,563 are in the United States. They include:
- OctoML
- Tonic.ai
- Duolingo
- Imbue
- Quora
- Cloudzero
- Veritone
- Unity
About 42% of the US-based companies reside in the San Francisco Bay Area, Boston, Seattle, and New York. AI startup growth will continue to center around these major tech hubs shortly.
10. Mistral AI raised a record of €105 million in May 2024.
(Financial Times)
A French start-up, Mistral AI, founded by a trio of former Meta and Google artificial intelligence researchers, Guillaume Lample, Arthur Mensch, and Timothée Lacroix, has raised €105 million in Europe’s largest-ever seed round.
Mistral AI generated about €240 million in funding, but the AI startup has yet to develop its first product. It plans to launch a new language model in 2024, similar to the generative AI system of OpenAI’s ChatGPT app.
Conclusion
AI funding soared to over $31 billion in 2024. Despite the economic challenges, generative AI startups are increasing and evolving. Their transformative impact on industries stimulates investments and growth. The market is anticipated to generate $42.6 billion in 2024 alone.
As top generative AI startups like ChatGPT from OpenAI continue to rake in multi-billion investments, it only shows AI’s notable role in shaping the future of technology and business.
FAQs on AI Funding Statistics for 2024
How much was invested in AI in 2024?
Funding for AI startups surpassed $31 billion in 2024, especially in Generative AI startups, with equity funding topping $14.1 billion across 86 deals as of the second quarter of 2024.
What is the largest AI funding round in 2024?
OpenAI generated the highest funding of $10 billion from Microsoft in January 2024.
Which country has the highest number of AI companies?
Over 18,563 AI companies reside in the US. These include OctoML, Tonic.ai, Duolingo, Imbue, Quora, Cloudzero, Veritone, Unity, and more.
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