Multibillion-dollar investments in artificial intelligence startups have become almost commonplace in Silicon Valley — with dollars raised for AI companies outpacing funding totals in every other category of tech, and reaching $17.9 billion in the third quarter.
According to PitchBook data, the value of funding for AI companies climbed 27% globally in the third quarter compared to the year before. That’s even as overall deals for startups fell 31% from a year earlier to hit $73 billion worldwide.
The opposing trend lines highlight a divide between AI startups and the rest of the industry. Rising interest rates and a post-pandemic slump have hammered venture capitalist funding, making AI one of the venture capital world’s lone bright spots. In particular, so-called generative AI technology has dazzled users and investors with its ability to generate photo-realistic images and human-sounding text in response to just a few words of prompts, and has brought in billions in funding for the largest companies.