Funding for AI startups reaches new heights in 2024

AI startups are not only breaking records but doing so at an accelerated pace, raising more money than ever before.

According to data from Stocklytics.com, AI startups have raised $33 billion in the first half of 2024. This is the highest H1 figure in the market's history, nearly matching 90% of the total raised in 2023 within just six months.

The surge in funding has been driven by the significant interest of venture capital (VC) investors, particularly following the Nvidia boom. AI startups have become a focal point for investors, drawing substantially more fresh capital than most other sectors. Crunchbase data reveals that companies and startups in this market have raised over $150 billion in funding rounds over the past three years, with 2021 setting the previous record with $48 billion in investments.

Record-breaking quarters

The first quarter of 2024 saw $8.2 billion invested in venture-backed AI startups, nearly 80% more than the $4.6 billion invested in the same period a year ago. However, this figure pales in comparison to the second quarter. In Q2, VC funding activity skyrocketed by 240% year-over-year, reaching $24.8 billion – the highest quarterly figure in the market's history.

The cumulative effect of these investments has propelled the total H1 funding amount to an impressive $33 billion, 177% more than in the same period a year ago. Interestingly, while the total funding amount has increased, the number of investments has decreased. This indicates that AI startups managed to raise more fresh capital in fewer funding rounds. Crunchbase data shows 516 VC investments in the first half of 2024, down from 569 in the same period of 2023.

Global distribution of AI funding

With $33 billion raised in the first half of the year, the cumulative funding amount for AI startups has surged to nearly $214 billion. More than 60% of this total funding, or $130.3 billion, has been directed to companies in the United States, with California leading the charge, underscoring US leadership in the AI industry.

Asian AI startups have secured the second-highest value in funding rounds, raising $48.5 billion, followed closely by European companies at $27.4 billion. The data also highlights that machine learning startups have attracted the most funding, raising $110.6 billion so far. AI software and information technology startups follow with $73.2 billion and $53.1 billion, respectively.