AI Investments: 2Q 2021 to 3Q 2023

Source Research:

AI/ML Investment Tracker

Presentation | 24 Jan 2024 | PT-2793

This chart data shows the investment value in Artificial Intelligence (AI) startups around the world. Below summarizes the key highlights from out research.

(Note: this data set did not include 1Q 2021 or 4Q 2023)

Key Highlights

  •         As of 3Q2023, US$32.9 billion was invested in AI startups for the year, with 1,689 rounds recorded. This marks an 11% dip in funding and 33% dip in number of rounds from the first three quarters of 2022. Despite the generative AI boom, overall global funding value for startups in the field has dipped in the past few years, reflecting the larger poor funding landscape driven by high interest rates and a bear market. 
  •        Venture Capital (VC)-led funding in 2021-2022 was largely replaced by AI leaders investing in or acquiring startups. This activity aims to: 1) continue to differentiate their proposition in an increasingly fragmented market; 2) build comprehensive ecosystems to support end-to-end AI deployments; 3) support other, overlapping business groups e.g., increase cloud infrastructure traffic.
  •        AI funding was driven by startups in key markets, primarily in the United States, China, and the European Union (EU). However, regulation, especially the EU AI Act may slow down regional investment in 2024.
  •        AI software made up the lion’s share of investments, likely due to growing consumer and enterprise demand for practical, accessible tools and innovation potential within the hardware market. One outlier is RISC-V, as plenty of vendors are investing in this open standard architecture – to circumvent the costly leaders: ARM/x86.