Bergur Thormundsson
Research expert covering technology in the Nordics, AI and smart cities
Artificial intelligence (AI) funding and startups - statistics & facts
Riding high on the artificial intelligence (AI) wave are the startups and pioneers of the tech industry. Since late 2022, the influence and importance of enterprises focusing on AI and the startups powering them have grown immensely. A renewed interest following a slump in 2021 came about by the release of ChatGPT and the pandora’s box of possibilities that generative AI promises to release on society and business. Leading in the funding and acquisition of AI startups are the major tech companies, such as Google and Microsoft, many of whom have acquired dozens of AI startups in the last year.
AI startups have jumped in value
In today’s startup, it has become clear that a focus on AI immediately provides a premium to a business. Across all series of startup funding, AI startups have seen a significant boost compared to their non-AI-focused counterparts. This increase becomes even more pronounced as a business matures, with startups at the B-series funding stage recording a 60 percent higher valuation than non-AI startups at the same stage. This is in line with the ongoing high rate of funding for AI startups worldwide. Since 2021 AI funding has been increasingly high and although 2021 marked the current high point of AI company funding worldwide, during 2022 and 2023 funding remained higher than before 2021.China’s champion leads in valuation
The most highly valued AI unicorn, that is any startup valued at over a billion, is ByteDance, the maker of Tik-Tok and its Chinese counterpart Douyin. Coming in at a valuation of over 200 billion U.S. dollars the company's valuation is staggering, dwarfing its counterparts. However, the other nine unicorns of the top ten list are all found in the United States, exemplifying the diverse and fertile framework for startups in the country. Despite China’s valuation champion it also comes in third of total funding raised for AI startups. The United States leads with nearly four billion U.S. dollars and Europe comes in at nearly two.AI startups pave the way
Across the globe, it is AI startups are pushing the boundaries of this new technology, especially in light of the generative AI evolution currently taking place, and powered by the financial strength of the large tech companies. It is therefore vital for all regions, to encourage economic growth and value generation, to develop an effective atmosphere and legal framework for startups and creatives to find their footing, or else lose out on the possibilities that these new AI companies bring. It is well to remember that Amazon and Apple were small companies once, any of the new AI startups could be the next one.
