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What the numbers say: Artificial intelligence startups in the U.S. have secured $11.7B in venture funding so far this year through mega funding rounds of over $100M. This year, the sector has nabbed 45.3% of the total VC funding deployed through mega venture funding rounds. Fintech and biotech sector startups came in at second and third spots, nabbing $6.5B and $1.7B, respectively. In 2021 and 2022, the fintech and healthcare sectors locked out the top two spots for the highest funding. Relevance: Funding has increased due to the rising popularity of generative AI startups such as OpenAI's ChatGPT and the heightened competition between larger tech organizations, such as Alphabet and Microsoft, that are trying to integrate generative AI into their core offerings. Why it matters: AI startups, especially generative AI, continue to defy the venture funding pullback. Last week, a Fortune report showed that median pre-money valuations of generative AI startups have doubled from $42.5M in 2022 to $90M in 2023. Lightspeed Venture Partners' Gaurav Gupta believes investors are pumping money into the sector due to a fear of missing out on prospective deals. Where is the sector headed: The generative AI sector is poised to grow at 32% CAGR into a $98.1B market by 2026. Index Ventures' partner Erin Price-Wright believes all software will have AI at its core within the next 10 years. |
