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AI’s Share Of US Startup Funding Doubled In 2023

Aug 29, 2023 - news.crunchbase.com
More than 25% of investments in American startups in 2023 have gone to AI-related companies, a significant increase from the average 12% of total funding attracted by AI startups from 2018 through 2022. This increase is despite a 50% year-over-year drop in overall startup investment in North America in the first half of 2023. AI's resilience and growth are not confined to a specific sector, as AI technologies can be applied across various industries.

The trend suggests that companies with compelling AI pitches are more successful in securing funding, even as most sectors see less investment. This could lead to AI becoming an essential part of startups' technology stacks, similar to how the internet became key to virtually every startup's business model. As a result, being an AI company may cease to be a unique categorization, not because it's irrelevant, but because it's too essential to ignore.

Key takeaways:

  • More than 1 in 4 investments in American startups this year have gone to an artificial intelligence-related company, doubling the share of investment going to AI from the previous year.
  • Despite a 50% decrease in overall startup investment in North America in the first half of 2023, AI-related investments have been resilient and are trending higher year over year.
  • AI is not specific to a particular industry and can be applied to many sectors, with companies in various industries securing funding with compelling AI pitches.
  • There is a possibility that being an AI company may cease to be a relevant categorization in the future, not because it's irrelevant, but because it's too essential for anyone to leave out.
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