Written by Supantha Mukherjee
STOCKHOLM (Reuters) – Funding for artificial intelligence and cloud companies in the United States, Europe and Israel is increasing after three years of decline and is estimated to reach $79.2 billion by the end of the year, venture capital firm Accelerator said. said in a report Wednesday. .
This is a 27% increase compared to $62.5 billion in 2023, and investments involving generative AI companies will account for about 40% of the 2024 figure.
“The seismic shift we’re seeing now in AI is bigger than anything we’ve seen in the past, whether it’s broadband, mobile or cloud,” Axel partner Philippe Bottelli said in an interview.
Of the total $56 billion in AI investments generated in 2023 and 2024, approximately 80% was invested in U.S. companies and 20% in Europe and Israel. Two-thirds of AI funding, or $37 billion, is being invested in companies building foundational models, Axel said.
Microsoft-backed OpenAI raised $6.6 billion earlier this month, Elon Musk’s xAI raised $6 billion in May, and Anthropic received $4 billion from Amazon.
In the US, OpenAI, Anthropic, and xAI led the funding rounds, while in Europe, Mistral, Aleph Alpha, and DeepL received the most funding.
About $25 billion was invested in private GenAI companies in the U.S. this year, compared to $6.4 billion in Europe, Bottelli said.
However, funding in Europe is increasing at a faster pace, with investment in generative AI in Europe in 2023 expected to be just $2.4 billion, a fraction of the $22.4 billion in the US.
The outlook outside of AI is less bright, Axel said, with the era of high growth in software giving way to an era of profitability.
(Reporting by Supantha Mukherjee in Stockholm; Editing by Jamie Freed)
