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Investment in artificial intelligence (AI) startups surged to $24 billion between April and June, more than double the amount from the previous quarter.
Crunchbase data highlights the growing demand for new technology.
Total investment in startups reached $79 billion, up 16% from the previous quarter, driven mostly by investment in AI, which became the largest sector for the first time, followed by healthcare and biotech.
Why is this important?
The success of OpenAI’s ChatGPT has started a race to adopt the latest AI technologies in areas such as business productivity, healthcare, and manufacturing.
But investors and big tech companies say the big benefits from huge investments in AI will only be realized in the next few years.
A few years.
Funding for AI companies: by the numbers
Five of the six billion-dollar funding rounds went to AI companies.
Notable deals include Elon Musk’s xAI raising $6 billion and AI infrastructure provider CoreWeave raising $1.1 billion in its latest funding round.
The list includes self-driving company Wayve and data preparation company Scale AI.
Outside of AI, cybersecurity company Wiz raised $1 billion in its latest funding round.
A wider view
Despite the increase last quarter, startup funding remains low compared to levels over the past three years.
Global fundraising fell 5% to $147 billion in the first half of this year, and was flat compared with the second half of 2023, according to Crunchbase.
Tight U.S. monetary policy has slowed a recovery in initial public offerings, hampering one of the biggest sources of revenue for institutional investors who typically invest in start-ups and sell shares at IPOs.
