Despite some recent layoffs at AI startups Stability AI and Tome, investor interest in AI remains high. Recent deals, such as Perplexity AI's reported plans to seek another $250 million-plus in funding at a valuation of up to $3 billion, demonstrate investors' continued willingness to invest in the sector. The successful IPO of Astera Labs, a developer of data center connectivity technology with use cases in generative AI, is also likely to increase investor appetite for AI.
Key takeaways:
- AI-related startups saw an increase in venture funding in Q1 2024 compared to Q4 2023, with $12.2 billion invested in 1,166 deals, a 4% increase from the previous quarter.
- However, this is a 25% drop from the $16.3 billion seen in Q1 last year, largely due to OpenAI’s $10 billion-plus round from Microsoft.
- The three biggest AI-related rounds of the quarter were Moonshot AI with over $1 billion, Figure with $675 million, and MiniMax with $600 million.
- Despite some layoffs in AI startups, investors continue to show significant interest in the evolving market, with AI search startup Perplexity AI seeking another $250 million-plus in funding at a valuation between $2.5 billion and $3 billion.