AI startups raised $11.8 billion in venture capital during the third quarter of 2024, despite broader concerns about the sector’s valuations and tightening restrictions on AI chip exports to China. This comes amid a 13% year-over-year drop in overall venture capital (VC) funding, according to data from Stocklytics.com. AI remains the dominant sector for investments, continuing to attract significant capital despite a decline in deal volume.
The total number of deals involving AI startups dropped by 28% in Q3 2024, with 79 deals recorded compared to 110 in the same period last year. However, several major funding rounds helped sustain optimism in the sector. For example, Safe Superintelligence, a California-based company working on safe AI systems, secured $1 billion in early-stage funding.
AI startups accounted for roughly 30% of global VC funding in the third quarter, reinforcing the sector’s prominence. Year-to-date, AI companies have raised nearly $53 billion, marking a record for the industry. This figure surpasses the $49.4 billion raised in 2021, previously the highest on record. The cumulative funding in the AI sector has now exceeded $241 billion, with US-based startups, particularly in California, capturing the majority of investment. US companies secured 65% of the total funding, or $155 billion, while startups in Asia and Europe raised $53 billion and $30.2 billion, respectively.
