TLDR:
- Total global investment in Generative AI (GenAI) is on track to reach more than $12bn (€11bn) in 2024.
- VC interest in the AI industry remains robust despite economic challenges in other sectors.
AI venture capital investment is on track to reach €11bn in 2024, with total global investment in Generative AI (GenAI) expected to surpass $12bn. The first quarter of 2024 saw $3bn (€2.7bn) in investments in the sector, indicating a nearly 100% increase from the previous year. Despite economic challenges such as interest rate increases and inflation in other industries, Venture Capital (VC) interest in AI remains strong. Investment funds in the industry grew from $1bn (€923m) in 2018 to $21.3bn (€19.6bn) in 2023, with a further increase expected in 2024.
VC investment in AI is diversifying across sectors like healthcare, natural language interface, visual media, and vertical applications, with investments growing from $77m (€71m) in 2018 to $5.1bn (€4.7bn) in 2023. North America leads in deal counts and value, followed by Europe. However, the GenAI space is still in its early stages, with over 75% of startups not having raised any equity funding yet. Some concerns arose in 2023 regarding certain business models that were quickly surpassed by newer technologies, leading to a slight ease in VC deals toward the end of the year.
Grit Young, EY Ireland Valuations Partner, expects the momentum in GenAI investment to accelerate in 2024, although a significant portion of the investment will be spent internally and not publicly disclosed. With AI investment expected to hit €11bn by the end of 2024, the sector continues to show promise for further growth and innovation.
