Exciting news in the world of artificial intelligence! OpenAI recently raised a staggering $6.6 billion in funding, valuing the company at $157 billion. But they are not alone in the AI fundraising game. Investors poured $2.9 billion into U.S.-based AI startups in the third quarter of 2024, according to PitchBook data.
Among the top three startups receiving funding were Magic, Glean, and Hebbia, raising $320 million, $260 million, and $130 million respectively. Magic is revolutionizing AI coding, Glean is developing an AI search app for businesses, and Hebbia is focusing on AI agents for various industries.
Looking at the bigger picture, AI has been a hot topic for investors for quite some time now. An earlier PitchBook report revealed that AI accounted for 41% of U.S. VC deals in the first half of 2024, with a significant portion of the total investment going to AI startups.
Even during challenging times, AI has shown remarkable growth, with the number of AI unicorns increasing by nearly 23% in the last year. However, along with opportunities, AI also brings challenges. The cost of developing AI models is high, with estimates predicting it will take $10 billion to create AI that surpasses human capabilities. Additionally, the energy consumption of AI poses environmental concerns, prompting tech giants to explore alternative energy sources such as nuclear power.
Despite these challenges, AI continues to attract founders and investors alike. Y Combinator, a renowned startup accelerator, accepted 156 AI-focused startups out of 208 in their latest cohort. AI is becoming more accessible and real for everyone, as highlighted by Sahil Agarwal, founder of AI safety startup Enkrypt AI.