OpenAI recently secured itself $6.6 billion With a valuation of $157 billion, the corporate has funding, but it surely is way from the one AI company with high fundraising potential. From July to September (Q3) 2024, investors invested $2.9 billion annually in the most recent US-based AI startups PitchBook data.
The three US startups that received probably the most funding were software development AI startup Magic, enterprise chatGPT startup Glean and AI document search startup Hebbia TechCrunch. The three raised $320 million, $260 million and $130 million, respectively, within the third quarter.
magic creates AI that may write code and Read up is working on an AI search app for businesses. Hebbia focuses on AI agents for finance, law and huge enterprises.
A previous PitchBook report from August shows that investor interest in AI is long-term and extends beyond the last quarter. The report showed that AI accounted for 41% of VC deals within the US in the primary half of 2024, with $38.6 billion of the whole $93.4 billion in VC deals going to AI startups.
Related: AI startups raised $50 billion last yr, but some investors are beginning to fail — here’s why
Last yr, AI was considered one of the few industries with the best growth amongst unicorn startups, or firms valued at over $1 billion. In an otherwise difficult fundraising yr, the variety of AI unicorns grew by 22.9%.
While it offers opportunities, AI presents its own unique challenges. On the one hand, the prices of developing an AI model are high. Anthropic CEO Dario Amodei said in July that it could cost $10 billion to coach AI “better than most people at most things.” He estimated that AI firms would reach this point inside the subsequent three years and that it currently takes about $100 million to coach an AI model.
AI also has a high electricity bill. Microsoft, Google and other major technology firms are counting on nuclear power as a source of carbon-free energy; AI helped increase Google’s greenhouse gas emissions by 48% in 4 years.
Nevertheless, AI stays an area of great interest amongst founders. 156 of the 208 startups Accepted into the summer course of Y Combinator, a renowned startup accelerator focused on AI.
Related: Y Combinator helped launch Reddit, Airbnb, and Dropbox. Here’s what I learned from free startup school.
A startup founder not affiliated with Y Combinator, Sahil Agarwal of AI security startup Enkrypt AI, spoke to Entrepreneur earlier this yr in regards to the dangers and opportunities posed by AI.
“ChatGPT has made AI viable for everyone,” he said.
