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Main article: Artificial Intelligence
2024
Global investment in generative artificial intelligence doubled in a year to reach $56 billion
At the end of 2024, investments generative artificial intelligence in (Genii) on a global scale reached $56 billion, which is a new record. This is almost twice - by 92% - more than in the previous year, when $29.1 billion was invested in startups in this area. Such data are provided in a study by PitchBook, the results of which TAdviser got acquainted with in early February 2025.
It is noted that the number of transactions for financing projects in the field of Genii is also growing. In 2024, 885 transactions were carried out against 691 in 2023. Activity peaked in the fourth quarter, when investment deals totaling $31.1 billion were announced, which is more than half of all investments in 2024. In particular, the company Databricks, which created the platform for machine learning, analysis and data processing, held a Series J funding round, during which $10 billion was raised for development. Startup xAI, overseen by Elon Musk, received $6 billion during the Series C round, and Anthropic raised $4 billion from Amazon. Another mega-round was OpenAI financing in the amount of $6.6 billion: this raised the company's valuation to $157 billion.
Analysts highlight several key market drivers. Organizations are increasingly using Genia to improve operational efficiency, automate routine tasks, analyze large amounts of information and create content. This reduces costs and provides a certain competitive advantage. Technological advances also play an important role: improvements in deep learning algorithms and innovations in neural networks empower AI models, making them more versatile and efficient.
On the other hand, there are some risks associated with the large-scale introduction of Genia: there is growing concern about the abuse of AI technologies, including the creation of deepfakes and the spread of misinformation, which can have far-reaching social consequences. Skepticism persists over concerns about an "AI bubble" that could burst and ethical questions about transparency and algorithm bias.
The PitchBook study says that American companies in 2024 attracted the lion's share of investments in the field of Genia. Startups outside the United States received only $6.2 billion from total investments, which corresponds to a share of 11%. Large sums were raised by Beijing-based Moonshot AI ($1 billion in February), French startup Mistral (approximately $640 million in June), Cologne-based DeepL ($300 million in May), Shanghai-based MiniMax ($600 million in March) and Tokyo-based Sakana AI (about $214 million in September).
In general, as noted, investment in AI is ahead of actual technological progress. In addition, experts warn against a potential glut in the market, since numerous startups can implement similar projects. In particular, at least four companies developing AI coding assistants (Augment, Magic, Codeum and Poolside) closed funding rounds worth more than $100 million in 2024. And many startups in the field of generative media (for example, Black Forest Labs, ElevenLabs) received investments in the amount of tens of millions of dollars. Against this background, pressure is increasing from investors who want to get a return on the invested funds. Technical problems and the huge computing power required to remain competitive can create additional problems for Genia companies.[1]
Investment growth in AI startups by 192% to $56 billion
The volume of global investments in startups operating in the field of generative artificial intelligence increased by 192% and reached a record amount of $56 billion. This information in January 2024 was published by digitalbusiness, which refers to the data of the PitchBook financial tracker.
The main share of investments was directed to the leading companies in the sector. In 2024, players such as OpenAI, Anthropic and xAI received significant rounds of funding. Thus, the company Databricks raised $10 billion in the J round, xAI - $6 billion, and OpenAI - $6.6 billion. Amazon's strategic investment in Anthropic amounted to $4 billion, which was also an important event for the market. The total value of transactions for the last quarter of 2024 reached $31.1 billion.
Large corporations have also shown interest in generative artificial intelligence. According to the publication, Google in 2024 spent $2.7 billion to attract specialists and license the technologies of the startup Character AI. Microsoft has invested $650 million in licensing Inflection AI models, while concluding a cooperation agreement with the company's CEO Mustafa Suleiman.
Investment activity has spread beyond the US. Startups outside the country have raised a total of $6.2 billion. Among the largest international recipients of investments are the Chinese Moonshot AI ($1 billion), the French Mistral ($640 million) and the German DeepL ($300 million). Japan's Sakana AI raised $214 million in September, while China's MiniMax received $600 million in March.
Nevertheless, experts warn of the possible risks of oversaturation of the sector. PitchBook analyst Ali Jawaheri emphasizes that the number of startups operating in similar directions is increasing. This creates high competition, especially among developers of AI programming assistants such as Augment and Magic, who closed rounds worth over $100 million each.[2]
2023
AI startups around the world increased the volume of attracted investments by 9% - up to $50 billion
At the end of 2023, the volume of investments in startups in the field of artificial intelligence on a global scale reached almost $50 billion. This is about 9% more than the result for the previous year, when investments in such projects were estimated at $45.8 billion. Relevant data are provided in the Crunchbase study, the results of which were published on January 4, 2024.
The report states that global investment in startups in all segments in 2023 amounted to about $285 billion. For comparison: in 2022, the figure reached $462 billion. Thus, a fall of 38% on an annualized basis was recorded. And against this background, the growth of the AI segment is especially distinguished, which is associated both with the rapid development of this area as a whole, and with the boom in generative services. Analysts Crunchbase note that only, and OpenAI Anthropic Inflection AI together managed to attract about $18 billion during 2023.
 | For a while - especially in the middle of [2023] - it seemed like investors were spending nine-figure sums every week on a new and better AI start-up. Sometimes there were so many large-scale rounds that they were difficult to count, - emphasizes Crunchbase. |  |
Analysts also note that many major rounds of funding for AI startups involved the world's leading IT corporations - Microsoft, Amazon, Google and Nvidia. Moreover, Nvidia is strengthening its position in the AI market thanks to its GPU-based accelerators, which were in short supply due to high demand from companies that create various AI services and teach large language models. It is noted that the largest corporations in Silicon Valley are displacing traditional technology investors in the AI segment.[3]
AI startups in the world raised a record $27 billion over the year
At the end of 2023, startups in the field of artificial intelligence on a global scale attracted approximately $27 billion for development, which is a record result. The previous maximum at $11 billion was recorded in 2021. Such figures are given in a study by PitchBook, the results of which were published at the end of December 2023.
The report said that of the $27 billion, about two-thirds were provided by corporations, and Microsoft Google. In Amazon particular, Microsoft invested $10 billion OpenAI in the developer company, and neuronets ChatGPT also participated in a round of financing for the AI startup Inflection AI in the amount of $1.3 billion. In turn, Google and Amazon jointly allocated $6 billion to support a young firm Anthropic that specializes in developing large language models.
Thus, as noted, technology corporations significantly outstripped venture capital funds in terms of investment in AI startups in 2023. This is explained by several reasons. Young companies prefer to partner with large IT corporations, since they, in addition to financial assistance, can provide cloud infrastructure and access to the most powerful hardware components that are necessary for AI training. At the same time, venture capital funds are forced to cut costs, adapting to the difficult macroeconomic situation.
| | Even the world's leading venture capital funds, which manage tens of billions of dollars, cannot fight to preserve the independence of these AI companies. Against the backdrop of the rapid development of AI platforms, tech giants seem to have taken control of most startups with exceptional potential, says Patrick Murphy, partner and founder of Tapestry VC, a venture capital fund.[4] | |
AI venture funding significantly exceeds investment in cryptocurrencies
According to PitchBook, in the second quarter of 2023, the volume of venture financing of cryptocurrencies fell to the lowest level since 2020, significantly inferior to investments in artificial intelligence.
2022
Global investment in AI technology has declined for the first time in 10 years
In 2022, global investment in artificial intelligence declined for the first time in 10 years. This is reported in a study that analysts of the NTI Competence Center in the direction of "Artificial Intelligence" on the basis of MIPT presented in July 2023.
According to experts, the decline in investment in AI can characterize the transition of investments from startups to mature companies implementing artificial intelligence. According to the report, the global venture capital market in 2022 amounted to $415 billion, showing a fall of 33% compared to 2021. The segment of artificial intelligence is 11% in 2022, and the share from 8 to 12% has been preserved for 6 years, the report noted. The venture capital market of AI in the world fell in 2022 by 31% and amounted to $45.8 billion. The number of transactions increased by 4% compared to 2021 and reached 2956. Compared to 2020, in 2022, the volume of investments in AI projects decreased by 47% in the volume of transactions and by 36% in terms of the number of transactions.
The leader in both volume and number of transactions is the United States, where funds for 2022 invested $26.7 billion in 1,150 transactions. Asian investors made 1,013 transactions, but the volume of investments amounted to $11.5 billion, which is 2.3 times less than in the United States.
The deals under consideration in the venture capital market include not only investments in the company's capital (transactions of rounds A, B, C and D), but also mergers and acquisitions M&A (), initial offerings on the stock exchange () IPO and transactions with special structuring (). SPAC
The number of M&A deals in AI fell 57% globally compared to 2021. A total of 259 transactions were made, 12% of them were in the field of health. In 2022, 19 IPOs (-18%) and 15 SPACs (-50%) took place - a company created specifically for merging with another private company that wants to go public, bypassing the IPO procedure.
In 2022, another 41 AI companies reached an estimate of more than $1 billion, becoming "unicorns." At the end of 2022, there were 166 AI companies in the world with an estimate of more than $1 billion. By the end of 2022, 258 unicorn companies appeared in the world, 16% of which are AI companies. The United States remains the leader in the number of unicorn companies. At the end of 2022, there were 105 unicorns in the United States, and 41 in Asia.
The expected dramatic fall occurred on the Russian market in 2022. Only 21 transactions worth $51 million were invested against 77 transactions worth $226 million in 2021, a drop of 78%.
Among the deals in 2022, experts highlight the purchase of a stake in Motive NT by Kaspersky Lab. The amount of the transaction was not disclosed.
According to the researchers, the structure of investments in the context of startup rounds changed very much in 2022. Many major rounds took place in 2021, including apparently delayed deals from 2019-2020. In 2022, investments fell 5 times, large investors paused, almost all transactions were in the earliest stages - seed and round A. 72% of all transactions in 2022 were in seed stages and round A.
In their analytical work, experts listed several trends in the global artificial intelligence market. Among them are large language models and ChatGPT, signs of the end of the era of Open Source technologies, the use of image-generating models in everyday life and work, as well as the emergence of new AI professions, the development of ethical artificial intelligence and the "new Internet" (when information can be searched not only in traditional search engines, but also in neural networks like ChatGPT).
Almanac "Artificial Intelligence 2022"
Global investment in artificial intelligence sank 27%
At the end of 2022, private investment in artificial intelligence on a global scale amounted to approximately $91.9 billion. This is 26.7% less than in 2021. The corresponding figures are reflected in the report of Stanford University, published on April 3, 2023.
It is noted that world costs in the AI sphere in 2022 decreased for the first time in a decade. A year earlier, record investments from private investors were recorded - approximately $125.4 billion. In 2022, private investment in AI was 18 times more than in 2013.
Impressive technological advances in AI have attracted the attention of politicians and industry leaders as well as the public. At the same time, the opinions of citizens regarding AI vary greatly depending on the country. On the one hand, the report says, neural network-based products and services help save time and money when solving complex problems and processing huge amounts of data from disparate sources. Artificial intelligence models help accelerate scientific progress, including in important areas such as the synthesis of new materials and the development of drugs. On the other hand, AI tools open up qualitatively new opportunities in terms of organizing surveillance of citizens, creating deepfakes, replacing human labor, etc.
The share of companies introducing AI stabilized by the end of 2022. Enterprises that apply such solutions have achieved reduced costs and increased revenues. The key applications of AI in the business sphere are process automation, computer vision and virtual agents. Overall, the share of companies implementing AI in 2022 more than doubled from 2017, according to the annual survey.
The report says that large language models that have led to significant progress in the field of AI are becoming larger and more expensive. For example, Google PaLM, one of the flagship models released in 2022, cost 160 times more and was 360 times larger than GPT-2, one of the first large language models released in 2019. Generative models such as Dall-E 2, Stable Diffusion and ChatGPT continue to develop actively.
The authors of the study say that until 2014, the most significant machine learning models were created by academia. The IT industry has since taken over. So, in 2022, 32 significant models were developed by various companies, while academic institutions produced only three. The fact is that modern AI systems require huge amounts of data, as well as large computing and financial resources. Therefore, often non-profit and scientific organizations cannot afford to develop advanced AI models due to financial difficulties.
In 2022, the US became the leader in private investment in AI technologies with $47.4 billion. In second place is China with costs of $13.4 billion, and Britain closes the top three with $4.4 billion. In terms of investment, such areas as medicine and healthcare ($6.1 billion), data processing and cloud technologies ($5.9 billion), fintech ($5.5 billion) are leading.
An analysis of indicators for 127 countries around the world suggests that the number of bills containing the phrase "artificial intelligence," which were adopted as laws, increased from one in 2016 to 37 in 2022. These documents cover a variety of areas - from reducing the risks of automation using neural networks to forming weather forecasts.
Artificial Intelligence Index Report 2023
2020: AI investment growth by 40%, to $67.9 billion
In 2020, the volume of investments in developments based on artificial intelligence technologies increased by 40%, reaching $67.9 billion. This is evidenced by data from the AI Index Report 2021 from Stanford University researchers.
The share of private investment in the development of artificial intelligence technologies in 2020 showed an increase of 9.3%, exceeding $40 billion. Among the leaders in the amount of funds raised: technology companies in the development of new medicines using AI solutions, including for the fight against cancer, as well as companies that specialize in research in the field of molecular medicine. Over $13.8 billion was invested in these developments, which is 4.5 times more than in 2019. Also among the leaders of the company, which develop unmanned vehicles ($4.5 billion) and companies developing educational products based on AI ($4.1 billion).
Mergers and acquisitions accounted for most of total investment in 2020, up 121.7 per cent on 2019, report says
The demand for specialists in the field of artificial intelligence has grown significantly over the past seven years. The US is the only country of six reviewed by researchers to record a decline in the proportion of AI job adverts from 2019 to 2020. This may be due to the COVID-19 coronavirus pandemic or the development of the AI labor market. Singapore, Brazil, India, Canada and South Africa have become the countries where demand for employees in this area has increased the most over the past 4 years.
Despite growing calls to pay attention to ethical issues related to the use of AI, companies show limited attention to the accuracy and fairness of decisions made using AI, according to a McKinsey survey. [5]]
2019
Investment in AI companies turned out to be a record - CB Insights
At the end of January 2020, CB Insights conducted an annual analysis of global investment trends in artificial intelligence and reported that in 2019, startups specializing in such technologies attracted a record investment of $26.6 billion, concluding more than 2,200 transactions around the world. For comparison, in 2018, about 1900 agreements were concluded for a total amount of $22.1 billion, and in 2017 - about 1,700 pieces for $16.8 billion.
The record recorded by analysts corresponds to the analysis of other organizations monitoring investments in the AI ecosystem. Earlier, the National Venture Capital Association announced that although total venture capital declined in 2019, investors contributed a record $18.4 billion to the development of AI startups in the United States.
Among the areas of investment, healthcare was the leader - investors invested $4 billion in the relevant AI companies at the end of 2019. It is followed by industries such as finance ($2.2 billion), retail ($1.5 billion), sales and cybersecurity. M&A deal activity was also the highest in healthcare, sales and retail. Another 2019 report found that private investors were most often keen to invest in areas such as self-driving, drug research, financial AI and facial recognition technology.
In addition, in 2019, the number of AI companies increased, whose value exceeded $1 billion. Among the new "unicorns" are the developer of autonomous robots for the delivery of goods Nuro and the analytical company DataRobot. All ten new billionaire companies are based in China, the UK or the US. Venture capital investors such as Plug and Play Ventures, Accel and Lightspeed Ventures were among the leaders in investing in the artificial intelligence market in 2019.[6]
40% of AI companies lie to investors
At the end of September 2019, the Wall Street Journal published the results of a study according to which 40% of 2,830 European startups that claimed to use AI lied to investors. In fact, all tasks instead of computers were performed by people.
If in 2013 AI used only one of 50 new startups, then by 2019 every twelfth company offers AI services. At the same time, the European startup ecosystem is becoming more mature: investments are increasing, production is growing. As a result, competition for partners and customers is also growing.
It turned out that for executives, the likelihood of stumbling upon a weak AI company is even higher than false statements about the sustainability of a startup. Given the rapidly growing assessments of AI companies, all customers are advised to conduct a comprehensive AI examination before concluding a contract. Experts also note that some companies inadvertently mislead their partners and customers. If the manager has not received a higher education in the field of computer science, then he cannot really assess the work of the company's AI tools, which means that he has to take his word to believe his employees.
Therefore, the leaders of any companies - both those who themselves work with AI and those who are looking for AI partners - experts give the same advice: make sure that you are dealing with real AI technologies. A cross-functional team should monitor the operation of AI throughout the enterprise throughout the life cycle of the tool.
All AI actions should be generally explainable and interpretable. AI technologies should be equipped with tools to identify systematic errors in their activities, and the technology department should ensure the reliability and safety of AI by monitoring the obsolescence of data or models.[7]
Record investment in AI startups
Artificial intelligence startups received $7.4 billion in funding in the second quarter of 2019, the highest on record. The number of deals was also growing. 488 transactions on artificial intelligence were concluded.
40% of European AI startups are not related to artificial intelligence - MMC Ventures
40% of European startups engaged in developments in the field of artificial intelligence do not actually use it. This conclusion was reached by analysts at the venture capital firm MMC Ventures based on a survey of 2,800 startups in 13 EU countries published in March 2019.
| | In 40% of cases, we could not find evidence of the use of artificial intelligence, "MMC Research Director David Kelnar told Forbes magazine. | |
Startups that "people perceive and consider AI companies are probably not," he said.
Some emerging technology developers use the buzzword "artificial intelligence" to draw attention to themselves and their products in order to get more funding. According to MMC estimates, companies that claim to work on AI solutions attract an average of 15-50% of investments.
At the same time, startups themselves do not always declare the use of artificial intelligence, Forbes notes. Some analytical sites attribute the prefix "AI" to companies, and the MMC report does not specify the percentage of companies that purposefully mislead their customers and investors when talking about the use of artificial intelligence.
The partner of intellectual property law firm Gill Jennings and Every, Peter Finney, confirmed the study's findings. The number of AI patent applications has grown as companies seek to make their businesses more attractive to investment, he said.[8]
| | The AI sector is a bubble that could soon burst, he said. | |
MMC studied the most popular AI startups, regions and destinations. Most of these startups in Britain are 479 by March 2019, followed by France (217 startups), Germany (196), Spain (166) and the Netherlands (103). As for the spheres, most startups are engaged in developments related to medicine and health maintenance.
2017: Investors put more into Chinese AI startups than American ones
In 2017, investments in startups from around the world occupied by artificial intelligence technologies grew by an impressive 150% and reached $10.7 billion, while in 2016 the amount of investments was $4 billion. Chinese AI companies took the lead in terms of attracted investment and outstripped their American counterparts. Read more here.
2016: AI startups raise $5 billion in investment
According to CB Insights, in 2016, startups in the field of artificial intelligence (AI) were able to attract a total of $5.02 billion in investments, which was the largest amount in the past five years.
The number of rounds of financing projects in the field of AI increased from 160 (2012) to 658 - that is, more than 4 times. The share of non-American startups also increased, gradually increasing from 21% to 38% over the period from 2012 to 2016, although most of the investment still goes to American companies.
Several megarounds of funding were conducted. The largest amount was received by the Israeli application Gett, which uses AI algorithms to deploy autonomous cars. Volkswagen backed Gett with a $300 million investment to expand Gett's predictive algorithms.
Notes
- ↑ Generative AI funding reached new heights in 2024
- ↑ Generative artificial intelligence funding hits new heights in 2024
- ↑ Global Startup Funding In 2023 Clocks In At Lowest Level In 5 Years
- ↑ Big Tech outspends venture capital firms in AI investment frenzy
- ↑ [[https://hai.stanford.edu/blog/state-ai-10-charts State of AI in 10 Charts
- ↑ CB Insights: AI startup funding hit new high of $26.6 billion in 2019
- ↑ Are People Lying About AI? How To Avoid A Common Trap
- ↑ Forty percent of ‘AI startups’ in Europe don’t actually use AI, claims report
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