However, there are concerns that AI could be the next bubble due to the rapid succession of massive funding rounds and high valuations. Despite this, experts predict that if spending on software increases due to productivity gains from AI, the sector's value will expand. Dharmesh Thakker of Battery Ventures predicts that the current software spend of around $600 billion could increase two to threefold over the next five to seven years as AI leads to GDP growth.
Key takeaways:
- Global venture capital funding reached $21.5 billion in February 2024, with the largest funding round going to Epic Games, which received a $1.5 billion strategic investment from Disney.
- AI companies captured a larger share of startup investment in February, with more than a fifth of all venture funding going to AI companies, amounting to $4.7 billion.
- There are concerns in venture capital circles that AI is the next bubble, due to companies in this sector raising massive rounds in quick succession and at huge valuations.
- Despite these concerns, it is predicted that spending on software will increase twofold to threefold over the next five to seven years as AI delivers productivity gains and leads to GDP growth.