It should come as no surprise that venture capital (VC)
investors are drilling down into startups building businesses with
Artificial Intelligence (AI) at the core. New data from PitchBook
actually shows that AI startups make up 22% of first-time VC
financing. They note that $7 billion of first-time funding raised
by startups in 2024 went to AI & machine learning (ML) startups
(this is according to their data through Q3 of 2024).
Crunchbase data also showed that in Q3 of 2024, AI-related
startups raised $19 billion in funding, accounting for 28% of all
venture dollars for that quarter. They importantly point out that
this excludes the $6.6 billion round raised by OpenAI, which was
announced after Q3 closed. With this unprecedented level of
investment in the AI vertical, there is increasing concern that i)
some startups might be using AI as more of a buzzword to raise
capital rather than truly focusing on this area, and/or ii) there
are bubbles in certain sub-verticals.
