However, investors are becoming more selective about AI projects, with stocks that surged during last year's AI hype now falling. Around 60% of stocks in the S&P 500 have risen so far in 2024, but over half the stocks in Citi's "AI Winners Basket" have fallen. Meanwhile, Big Tech companies are increasing their spending on AI infrastructure, such as Microsoft's $3.3 billion investment in a Wisconsin data hub to enhance AI use.
Key takeaways:
- American venture funding reached its highest quarterly total in two years, with investments for the second quarter amounting to $55.6 billion, a 47% increase over the first quarter, largely due to major investments in AI firms.
- Despite the recovery in VC funding, the IPO market remains tepid, with large tech companies needing to list publicly at a higher pace for VC returns to increase.
- Investors are becoming more selective about AI projects, with stocks that rose during last year's AI hype now falling, and companies needing to demonstrate evidence of their AI capabilities.
- Big Tech companies are increasing their spending on AI infrastructure, such as Microsoft's $3.3 billion investment to establish a data hub in Wisconsin, which could provide companies with more advanced AI capabilities.