In 2024, startup funding declined by a dozen percentage points, while investments into projects linked to innovative artificial intelligence (AI) skyrocketed, illustrating a 62% growth.
In 2024, global investments in artificial intelligence (AI) experienced a significant surge, with global funding reaching $110 billion — a 62% increase from the previous year, according to the latest data from the analytics firm Dealroom.
This growth is particularly notable given that overall tech startup funding declined by 12% during the year. In total, privately backed companies (both startups and scale-ups) raised $227 billion last year. As we can see, half of that funding was funneled toward AI-powered projects, which are supported by major global investors.
Yoram Wijngaarde, the founder of Dealroom, said the surge of investments in AI is nothing like the dot-com bubble of the late 1990s and early 2000s: “This is the biggest wave ever by absolute amounts invested. There’s never been anything like it.” In his opinion, the depth of the AI impact on the investment market is partially explained by the fact that the technology deals with a much wider ecosystem, including but not limited to hardware, software infrastructure, end-user applications, and foundational models.
Analysts at JPMorgan also conclude that investors’ enthusiasm about AI is not too similar to the 2000s dot-com bubble. The valuations of modern tech companies are directly linked to their earnings rather than just hope of future profits, as it was in the late 1990s. One example is Nvidia, whose earnings for the whole of 2024 exceeded analyst expectations. Hence, investors today are betting heavily not only on AI’s ability to transform industries but also on its ability to drive profits, even as overall funding dries up. This reflects a strong belief that AI will continue to drive innovation and deliver substantial returns.
