AI, cloud funding in US, Europe and Israel to hit $79 bln in 2024, Accel says
By Supantha Mukherjee
STOCKHOLM, Oct 16 (Reuters) -Funding of artificial intelligence and cloud companies in the U.S., Europe and Israel is rising after three years of decline and is estimated to hit $79.2 billion by the end of the year, venture capital firm Accel said in a report on Wednesday.
That is a 27% increase over 2023's $62.5 billion, and investments involving generative AI companies represent about 40% of the 2024 figure.
"The tectonic shift we are seeing with AI right now is bigger than anything that we have seen in the past, be it broadband or mobile or cloud," Philippe Botteri, a partner at Accel, said in an interview.
Of the $56 billion invested in generative AI in 2023 and 2024 combined, about 80% has gone into U.S. companies versus 20% for Europe and Israel. Two-thirds of the AI funding, or $37 billion, has been invested into companies building foundation models, Accel said.
Microsoft-backed OpenAI raised $6.6 billion earlier this month, Elon Musk's xAI raised $6 billion in May, and Anthropic received $4 billion from Amazon AMZN.O.
While OpenAI, Anthropic, and xAI led the funding rounds in the U.S., Mistral, Aleph Alpha and DeepL got the most funding in Europe.
About $25 billion was invested in private GenAI companies in the U.S. this year versus $6.4 billion in Europe, Botteri said.
However, funding in Europe is growing at a faster rate, as in 2023, generative AI investment in Europe was just $2.4 billion, a fraction of the $22.4 billion in the U.S.
Beyond AI, the outlook is not as bright, and the era of high software growth has been replaced by a focus on profitability, Accel said.
Reporting by Supantha Mukherjee in Stockholm; Editing by Jamie Freed
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
