2023 Sets Record as AI Companies Globally Raise Unprecedented $50 Billion, Data Reveals

• ByStartupStory     |    December 29, 2023

Artificial intelligence companies globally have soared to new heights, amassing a staggering sum of nearly $50 billion in funding this year, as reported by data aggregated by AltIndex.com. This figure marks the second-highest fundraising achievement in the history of the global AI market. 

The exponential growth of the AI sector has been nothing short of remarkable, with its value skyrocketing to $240 billion within merely three years, attracting a quarter of a billion users worldwide. This meteoric rise has magnetized substantial attention from venture capital investors who injected billions into burgeoning AI startups. Despite a slowdown in VC funding, 2023 emerged as the second-most successful year for fundraising in AI, following closely on the heels of the groundbreaking 2021.

According to statistics from Crunchbase, 2021 saw AI companies and startups amass a staggering $78.5 billion, more than double the funding amassed in 2020. While the fundraising momentum experienced a 42% dip in 2022, AI entities managed to secure an impressive $45.2 billion. 

However, the trend took an upward swing in 2023, with companies in this domain raking in $4.5 billion more than the preceding year, culminating in a grand total of $49.8 billion. A noteworthy observation is that almost 60% of this value, totaling $28.8 billion, was raised in the first half of the year, demonstrating a modest 4% decrease compared to the same period in 2022. Nevertheless, the latter half of 2023 witnessed a meteoric rise, witnessing an infusion of $20.9 billion in funding, nearly a 40% surge from H2 2022.

Despite a dip in the number of investments from 2022, the total funding quantum escalated by $4.5 billion year-over-year, indicating that AI enterprises managed to secure larger capital inflows through fewer funding rounds. 

The statistics unveil that the AI industry observed 842 VC investments this year, a decrease from the 1,101 recorded in 2022. The cumulative funding amassed within the AI sphere has now surged to a monumental $333 billion, with nearly $50 billion raised this year alone.

As revealed by the data, approximately 55% of this funding, totaling $189 billion, found its way to US-based companies, predominantly centered in California. Asian AI entities secured the second-highest funding value, exceeding $96 billion, while European counterparts amassed a total funding of $35.3 billion. According to industry experts, ‘Bringing world-class AI talent into Singapore can substantially enrich the industry.’

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