AI Startups Attract Record $97 Billion in 2024

In 2024, U.S. venture capitalists invested a record $97 billion into artificial intelligence startups, accounting for nearly half of the total $209 billion raised by all startups in the country. Notable companies like xAI, OpenAI, and Anthropic led this surge, reflecting a significant shift in funding dynamics as AI captured 46.4% of total venture capital, up from less than 10% a decade ago. Despite this growth in AI funding, overall venture capital raised hit its lowest in five years at $76 billion, indicating challenges for traditional startups, particularly in sectors like enterprise software. The global landscape painted a stark contrast, with funding for European and Asian startups declining significantly. Analysts note that while established AI companies thrive, smaller firms struggle to compete for capital-intensive foundational models. The anticipated recovery in IPOs and exits, supported by favorable policies under the incoming administration, may offer some hope for the broader venture capital ecosystem.