AI Startups Dominate Venture Capital in a Record-Breaking Year
The AI sector had a record-breaking year in 2024, securing over $100 billion in global venture capital — nearly double the $55.6 billion raised in 2023. This explosive growth pushed AI’s share of global VC funding to 37%, while accounting for 17% of all venture deals, making artificial intelligence the most dominant sector in the startup landscape.
In the U.S., AI startups alone captured nearly 46% of total venture deal value, underlining the overwhelming attention from AI investors and VC firms. While applications of AI varied widely, the largest funding rounds were concentrated in infrastructure and foundation model labs. All of the top five global VC deals in 2024 were in AI infrastructure — with four of them closing in the final quarter of the year.
Among the most notable were multi-billion-dollar raises by OpenAI, Anthropic, and Inflection AI, each securing strategic capital to accelerate training of large language models and other compute-intensive systems.
Despite the headlines going to late-stage giants, most AI funding activity was concentrated in the early stages. Seed and Series A rounds made up the majority of deal volume, as AI investors look to back the next generation of startups early, betting on disruptive potential across industries from enterprise software to healthtech and robotics.
Top Venture Capital Firms Investing in AI
AI’s explosive growth has driven nearly every major VC firm to shift their focus toward the sector. In 2024, firms like Sequoia Capital, Andreessen Horowitz (a16z), Index Ventures, Coatue, and Greylock aggressively scaled their AI portfolios. Notably, a16z launched a $1.5 billion AI-focused fund, underscoring just how central artificial intelligence has become in venture strategy.
Beyond traditional VCs, corporates and sovereign investors are now among the most influential players in AI funding. Tech giants including Microsoft, Google, Amazon, Nvidia, and Oracle have made strategic investments in AI startups, gaining early access to next-gen AI infrastructure and models. Microsoft’s multi-billion-dollar deal with OpenAI exemplifies this deeper corporate engagement — blending funding with product integration and cloud support.
Several new specialist funds have also emerged to capitalize on the AI boom. Firms like Lightning AI, Radical Ventures, and Air Street Capital focus exclusively on machine learning startups, deploying capital at a rapid pace. These dedicated AI investors are often first movers in highly technical areas like model interpretability, autonomous systems, or AI agents.
The shift isn’t limited to VCs and corporates. Sovereign wealth funds from regions like the Middle East and Asia have begun investing heavily in AI startups to strengthen their national tech ecosystems. Meanwhile, cloud providers such as Microsoft Azure and AWS now offer compute credits in tandem with funding — an added incentive for early-stage founders seeking both capital and resources.
The Biggest AI Investments and Startup Breakthroughs
Some of the largest venture capital deals in history happened in AI during the past year, reflecting the capital intensity of training and scaling foundation models.
OpenAI led the way with a multi-stage $10 billion round led by Microsoft and other backers, valuing the company at around $29 billion post-money. Anthropic, another leading foundation model lab, secured a $4 billion commitment from Amazon, including a strategic cloud partnership. Prior to that, Anthropic raised $450 million in a round led by Spark Capital — one of the largest AI deals of 2024.
Inflection AI, an emerging player in the large language model space, raised $1.3 billion in mid-2023. The round included backing from Microsoft, Reid Hoffman, and several prominent investors, cementing Inflection’s status as one of the top AI startups globally.
These mega-rounds show just how capital-intensive frontier AI development has become — and how willing AI investors are to fund companies shaping the future of intelligence.
As we move through 2025, the momentum continues. While mega-deals have dominated headlines, early-stage opportunities remain abundant. Areas like AI-powered enterprise software, autonomous robotics, and AI-native developer tools are seeing increased interest. For both early- and late-stage founders, this remains one of the most active and competitive markets for venture capital globally.
