Despite the tough venture capital market, AI startups raised $11.8 billion in the third quarter of 2024, accounting for 30% of the total, according to Stocklytics. Investors remain optimistic despite market turmoil.
Artificial intelligence (AI) startups accounted for 30% of all venture capital (VC) funding in the third quarter of 2024, according to analytics firm Stocklytics. Despite the overall VC market decline, AI startups raised $11.8 billion during the period, indicating continued investor interest in the sector. External factors, including US restrictions on AI chip exports and disappointing results from some startups in the past, have created a more cautious investment environment but have not cooled the sector.
The number of AI-related deals fell 28% year-over-year, from 110 in Q3 2023 to 79 in Q2 2024. However, large deals maintained positive sentiment for the sector, with $11.8 billion raised, in line with levels seen in 2023 and early 2024, excluding a record $29.6 billion raised in Q2 2024. While the overall VC market declined 13% in activity, AI remained a key investment area.
AI and blockchain are investment hot spots
Nearly $53 billion has been invested in AI this year, up 35% from the first three quarters of 2023, according to Crunchbase data. Notable deals include OpenAI’s $6.6 billion funding round, which valued the company at $157 billion. Total investment in AI has now surpassed $241 billion, with U.S.-based companies accounting for $155 billion, or nearly 65% of the total. Asian AI startups have raised $53 billion, while European companies have raised $30.2 billion.
The convergence of AI and blockchain technology is also attracting the attention of venture capitalists. Cosmo Jiang, portfolio manager at Pantera Capital, expressed interest in the growth potential of the combination of AI and crypto. In line with this trend, VanEck recently launched a $30 million venture capital fund targeting AI and crypto startups, reinforcing the role of blockchain technology in the future of AI development.