Islamabad, Oct 21: Generative AI Startups Attract $4 Billion in Investments During Q3 2024
Recent fundraising data from PitchBook shows that many investors are still optimistic about generative AI, despite some doubts about its ROI.
In Q3 2024, venture capitalists made 206 acquisitions totaling $3.9 billion in Generative AI Startups businesses, excluding OpenAI’s $6.6 billion round. Across 127 transactions, $2.9 billion of that amount was invested in American enterprises.
Coding helper Magic ($320 million in August), enterprise search service Glean ($260 million in September), and business analytics company Hebbia ($130 million in July) were among the largest investment rounds in Q3. Globally, the Japanese scientific discovery business Sakana AI closed a $214 million tranche in September, and China’s Moonshot AI secured $300 million in August.
Despite backlash from IT experts regarding its dependability and exploitation of protected content, generative AI is still gaining traction in the market, as seen by VC interest.
These venture capitalists believe that generative AI will overcome present obstacles in the long run and will be widely adopted across profitable industries.
According to a Forrester analysis, 60% of people who are currently skeptical about generative AI will eventually use the technology—whether they realize it or not—for everything from summarizing to coming up with original solutions to problems. Compared to Gartner’s former estimate that 30% of generative AI initiatives will be shelved after reaching the proof-of-concept stage by 2026, this prognosis is noticeably more optimistic.
Brendan Burke, senior analyst of emerging tech at PitchBook, told TechCrunch:
Large customers are rolling out production systems that take advantage of startup tooling and open source models. The latest wave of models shows that new generations of models are possible and may excel in scientific fields, data retrieval, and code execution.
