Machine-learning startup Inflection AI alone raised $1.3 billion last quarter. While that’s down from the $29 billion invested in H1 2022, by comparison it is higher as a proportion of total funding. That includes the $10 billion funding to OpenAI led by Microsoft in January. Since Q3 2022, each quarter’s global funding total has dropped by more than 45% year over year.Ĭompanies categorized as AI in Crunchbase raised $25 billion in the first half of 2023, representing 18% of global funding. Dollars and deals declineĬrunchbase data shows that we are now four to five quarters into the current funding decline. It’s safe to say that without the AI fervor kicked off by the launch of OpenAI’s ChatGPT in November, venture funding so far in 2023 would have been even lower. Nearly a fifth of total global venture funding so far this year has come from the AI sector alone, per Crunchbase.
The slowdown happened despite three notable events in H1: Large rounds to AI-driven companies led by corporate investors Microsoft, Nvidia and Google alongside venture firms the billion-dollar acquisition of language model training platform MosaicML by data warehouse company Databricks and the precipitous stock market climb of Nvidia, whose chips power much of the computing to train large language models. In H1 2023, global funding reached $144 billion, marking a 51% decline from the $293 billion invested in H1 2022 and a 10% decline from the second half of 2022. The first half of 2023 is down by similar proportions. That’s down 49% compared to the second quarter of 2022, when startup investors spent $127 billion.
Global venture funding in Q2 2023 fell 18% quarter over quarter to $65 billion, Crunchbase data shows. Startup investors globally continued to scale back their pace in the second quarter of 2023 despite large funding and M&A deals in the artificial intelligence space.
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