By 2024, investment in generative AI, which includes a range of AI-based applications, tools and services to generate text, images, video, voice, music and more, will have reached new heights. Companies in this space worldwide have raised $56 billion from venture capital investors in 885 deals.
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This total is a new record for this segment. That’s 192% more than in 2023, when investors poured $29.1 billion into generative AI startups across 691 deals.
“We are not seeing a slowdown in generative AI funding, as large companies like OpenAI, Anthropic and xAI continue to receive large investments and launch competitive new products,” said Ali Javaheri, an emerging technologies analyst at PitchBook, which compiled statistics from 2024 specifically for TechCrunch. .
The deal value in Q4 2024 grew to $31.1 billion thanks to the closing of large rounds such as Databricks’ $10 billion Series J, xAI’s $6 billion Series C, Anthropic’s strategic investment. $4 billion from Amazon and $6.6 billion round from OpenAI.
Mergers and acquisitions accounted for a small portion of generative AI investment in 2024, at $951 million (this does not include all-cash acquisitions by Google, Microsoft, and Amazon).
American companies attracted most of the funds; startups outside the United States received only $6.2 billion of all investments in 2024. However, there were also big deals: Beijing-based Moonshot AI raised $1 billion, French startup Mistral $640 million. Cologne-based DeepL, $300 million, Shanghai-based MiniMax, $600 million, and Tokyo-based Sakana AI, $214 million. dollars.
At the same time, analysts already say that the generative AI sector risks becoming oversaturated with extremely similar or even identical startups (take, for example, the already existing AI “clones” for programming: Augment, Magic, Codeium and Poolside).
Additionally, Javaheri said, the technical challenges and enormous computing costs required to remain competitive could pose additional challenges for generative AI companies.
Thus, “infrastructure” startups (for example, in the data center sector, such as Crusoe, which raised $600 million, or Lambda, with its $320 million) will continue to trend. Growing demand for data centers to support AI will push global spending in the sector to $250 billion a year, according to investment firm KKR.
Author:
Ekaterina Alipova
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
