The year 2024 has been a game-changer year for the artificial intelligence (AI) funding segment equipped with nearly $100 billion invested by mid-December. This means that AI is shaping up and gradually becoming the defining technology of our time. What is fascinating about it is the way money is being spread across different areas and a big chunk is going to the foundation model companies while the rest is fueling some important sectors including autonomous driving, healthcare, robotics and marketing.
Most of the investors are learned to have agreed to a point that focus is shifting from simply building AI infrastructure to developing applications for solving real problems. Rory O’Driscoll from Scale Venture Partners said that 80% of the investments targeted AI in 2024. However, the question that investors are asking is where can AI make the most difference and when is it good enough.
The shift is also highlighting the concerns about accuracy in AI tools. Sundeep Peechu of Felicis predicts a future where AI and humans work together equipped with AI handling routine tasks and humans stepping in for oversight.
Some firms like Menlo Ventures are taking bold steps by creating funds dedicated entirely to AI startups. Their partnership with Anthropic is a prime example as the fund does not just provide money, but also offers startups an access to AI expertise as well as AI tools.
AI is also making a tangible impact on productivity apart from funding. Dharmesh Thakker from Battery Ventures said that companies applying AI are becoming more efficient and often reaching profitability faster.
The next big thing seems to be agentic AI, which is a system that can handle entire workflow autonomously. Investors caution against expecting immediate results. O’Driscoll suggested to zoom out 10 years and no one will build software without AI at its core.
