AI Startups Dominate Funding, Reaching Record $97 Billion in 2024
AI-focused startups have become a major force in the funding landscape, with a record $97 billion raised in 2024, according to PitchBook data. This marks nearly half of the total $209 billion raised by U.S. startups, the highest share ever recorded.
Overall startup funding saw a one-third increase from the previous year, but venture capital (VC) firms faced challenges, raising only $76.1 billion across 508 funds— the lowest amount since 2019.
While AI startups attract huge investments, many traditional sectors, like enterprise software, are struggling to secure funds at reasonable valuations, reflecting broader post-pandemic trends.
Exits, including IPOs and acquisitions, reached $149.2 billion, nearly $30 billion more than in 2023. However, outside the U.S., startup funding dropped significantly, with Europe and Asia both seeing declines.
The shift highlights the growing divide in venture capital, where established firms and top AI startups thrive, while others face an uphill battle.