AI Startups Attract $24 Billion in Q2, Doubling Previous Quarter’s Funding

By Sunil Sonkar
2 Min Read
AI Startups Attract $24 Billion in Q2, Doubling Previous Quarter's Funding

This is an era of technology advancement at a rapid pace and latest data from Crunchbase reveals an astonishing trend. It is learned that investments in artificial intelligence (AI) startups have skyrocketed. About $24 billion has been invested in the second quarter of 2024. The figure is more than double compared to the first quarter of 2024. The trend highlights growing enthusiasm in the potential of AI. The overall startup funding grew by 16% and has reached to $79 billion. AI is the largest sector and has eclipsed for the first time the healthcare and biotech segments.

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The success story of OpenAI’s ChatGPT has ignited a race to integrate AI into various sectors. Investors have a firm belief in the transformative power of AI. However, it is yet to know when the investments will yield tangible benefits. Prominent investors and tech giants argue that real rewards will likely take years to materialize.

Data reveals a vivid picture. Five funding rounds of six billion-dollar were secured by AI companies. Some of the notable deals include Elon Musk’s xAI that raised $6 billion and AI infrastructure provider CoreWeave that secured $1.1 billion. Other significant players include automated driving company Wayve and data preparation company Scale AI.

However, it is important to contextualize the figures within the broader funding landscape. Startup funding is still subdued compared to the highs of the past three years. Global funding witnessed a 5% drop to $147 billion in the first half of 2024. A tight monetary policy in the U.S. slowed the revival of initial public offerings (IPOs). Hence, exit strategy for institutional investors faded away. This has put a damper on potential returns.

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