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The artificial intelligence sector encompassed almost a third of all global venture capital funding, representing five out of six rounds in the second quarter, according to a DataTrek Morning Briefing.
Overall global venture capital funding picked up in the second quarter, after the lowest two quarters since 2021. Venture capitalists invested $79B in startups globally this quarter, up 12% year-over-year.
For the first half of the year, global funding was flat, compared to -5% year-over-year to $147B in the second half of 2023.
AI-related startups made up $24B or 30% of the total funding; healthcare and biotech made up $17B or 22% of the funding; hardware companies, largely tied to AI infrastructure and semiconductors, made up $11B or 14%; and financial services companies made up $10B or 13% of the total funding, the report said.
“Since 2023, funding has fluctuated quarter by quarter based on an increase in large growth rounds to pre-IPO companies and to companies in the AI sector,” analysts from Crunchbase said. “This past quarter is no exception.”
In addition, five out of the six billion-dollar funding rounds this quarter involved AI startups. Those included Elon Musk’s gen AI startup xAI, which raised $6B; CoreWeave, an AI infrastructure provider, which raised $1.1B; automotive driving company Wayve; which raised $1B; data preparation company Scale AI, which raised $1B; and AI biotech company Xaira Therapeutics, which raised another $1B. All but Wayve are U.S. companies.
“We believe the US has a superior ability to foster innovative companies given a strong American educational system, business friendly regulatory structure, and relentless focus on disruptive technology,” said Jessica Rabe, co-founder of DataTrek.