AI Startups Secure $11.8 Billion In Q3 2024 Amid Venture Capital Decline

According to Cointelegraph, despite a general decline in venture capital funding, artificial intelligence startups experienced another quarter of significant cash injections. Data compiled by analytics company Stocklytics revealed that AI startups raised $11.8 billion over the past 90 days, representing 30% of total venture capital funding in the third quarter of 2024. This surge occurred despite increased export restrictions on AI chips in the United States, valuation uncertainties, and earlier disappointing earnings from startups, creating a mixed landscape for investors. The analysis indicated that although investors are becoming more selective about which AI startups to support, their overall interest remains robust. Stocklytics analyst Neil Roarty noted that the $11.8 billion of fresh capital is close to the quarterly figures seen throughout 2023 and 2024, excluding the record $29.6 billion raised in Q2 2024. However, the deal count declined, with the total number of transactions dropping by 28% year-over-year to 79 in the third quarter, down from 110 in the same period of 2023. Roarty mentioned that larger deals have kept sentiment in the sector positive, even as overall VC funding activity slowed down, falling by 13% year-over-year. Data from Crunchbase shows that investors have injected close to $53 billion into the AI sector so far this year, which is 35% more than in the first three quarters of 2023. Notable deals include OpenAI’s recent $6.6 billion round at a $157 billion valuation. With this quarter’s figures, the cumulative funding amount in the AI sector now exceeds $241 billion, with US companies raising almost 65% of that, or $155 billion. Asian AI startups have raised $53 billion, while European AI firms have secured $30.2 billion. One of the key strategies of venture capitalists is the convergence of AI and blockchain technology. Pantera Capital’s portfolio manager Cosmo Jiang expressed excitement about opportunities at the convergence of AI and Crypto, noting that this distinction may become outdated in a few years. Additionally, investment manager VanEck announced a new venture fund on Oct. 9 targeting AI and crypto startups, with $30 million available for pre-seed and seed-stage companies.