AI investments make up 33% of total U.S. venture capital funding in 2024

AI continues to dominate in 2024, capturing investor interest as the field’s rapid growth fuels mainstream adoption. The rise of ChatGPT two years ago set off a surge in AI investment, driving billions toward promising generative AI startups across industries.

With three months remaining in the year, data reveals that AI investments are increasingly dominating venture capital funding in the United States.

According to recent figures from Statista, AI-related investments accounted for 33% of total VC-backed investments in U.S.-based companies during the first nine months of 2024. This share has more than doubled from 14% in 2020, a trend likely to continue rising.

“AI has sucked up an increasingly large chunk of VC funding in the United States in recent years. In the first nine months of 2024, AI-related investments accounted for 33 percent of total investments into VC-backed companies headquartered in the U.S. That’s up from 14 percent in 2020 and could go even higher in the years ahead,” Statista notes.

Click to see a larger image (Credit: Statista)

Most Well-Funded AI Startup Companies

Backing up this surge, an early October report from Accel found that 40% of the $79.2 billion invested in cloud companies for 2024 was directed at generative AI startups, emphasizing the field’s rapidly growing footprint.

The interest in AI extends across multiple data sources. Crunchbase data, analyzed by EY, reports that 37% of the $38 billion raised by VC-backed firms in Q3 2024 involved AI-focused companies, with four of the 10 largest deals linked to the sector.

This wave of AI investment is likely the start of a longer journey. According to EY, much of the current funding aims to build foundational AI infrastructure, including the development and training of AI models. Once this foundational stage settles, a second wave of funding could emerge, focusing on how to best apply AI’s potential in practical, real-world scenarios.

Meanwhile, Accel’s October report notes that the top six generative AI firms across the U.S., Europe, and Israel accounted for about two-thirds of all funding raised in this category. OpenAI stands out with $18.9 billion raised between 2023 and 2024, leading the pack by a wide margin. In the U.S., Anthropic and Elon Musk’s xAI follow in second and third, with $7.8 billion and significant funding, respectively.

In Europe, the largest rounds went to the UK’s Wayve, France’s Mistral, and Germany’s Aleph Alpha. Globally, companies developing foundational AI models—key to powering today’s generative AI tools—continue to attract the bulk of funding, making up two-thirds of all generative AI investments.

Big Tech and AI Investments

The U.S. continues to lead the way in overall generative AI investment. Of the $56 billion invested globally in generative AI companies from 2023 to 2024, 80% went to U.S.-based firms, according to Accel.

Tech giants like Amazon, Microsoft, Google, and Meta are pouring $30 billion to $60 billion annually into AI, highlighting just how significant this technology has become. Major players like OpenAI, Anthropic, and xAI are spending billions, while smaller challengers such as Cohere, H, and Mistral are investing millions.

Looking ahead to 2025 and beyond, AI investment shows no signs of slowing down. Goldman Sachs Research projects that funding could reach nearly $100 billion in the U.S. and $200 billion worldwide by 2025.