AI defies downturn: Investors pour billions into AI startups

July 6, 2024

AI defies downturn Investors pour billions into AI startups

AI Funding Boom

  • Investors are pouring money into artificial intelligence (AI) startups, defying the broader slowdown in startup funding.
  • AI startups raised $27.1 billion from April to June, nearly half of all US startup funding during that period.
  • This is a 57% increase from the same period last year.
AI defies downturn Investors pour billions into AI startups

Reasons for AI Boom

  • The release of OpenAI’s ChatGPT chatbot in late 2022 sparked renewed excitement in generative AI technology.
  • AI is seen as a powerful tool that can boost efficiency and growth for businesses.
  • Investors are betting on the vast potential of AI, with some predicting it will be bigger than smartphones, PCs, and social media combined.

Challenges for AI Startups

  • Building AI products requires significant resources like powerful computer chips and cloud storage, leading to high expenses.
  • Competition from big tech companies like Microsoft and Amazon could make it harder for AI startups to secure funding.


The AI sector is experiencing a surge in investment despite a general downturn in startup funding. While AI offers immense potential, challenges like high costs and competition from big tech companies remain.

Source: Read For More

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