AI Startups Shine in 2024, Raising $89.7 Billion; $10.4 Billion in Q1 2025 Sets a New Benchmark

Despite the US government’s expanded export restrictions on AI chips to China, investor concerns over AI valuations, and underwhelming earnings reports in the first half of 2024, AI startups had one of their best years ever. In 2024, they raised a record-breaking $89.7 billion, the highest amount in the sector’s history. The momentum continued into 2025, with the AI industry seeing its strongest start to a year yet. According to data from AltIndex.com, AI startups raised an impressive $10.4 billion in Q1 2025, marking their best first quarter ever.

One-Third of 2022 and 2023’s Total Raised in 45 Days

In just 45 days, AI startups have raised one-third of the total funds from 2022 and 2023 combined.

Since the Nvidia boom, AI startups have become a prime target for venture capitalists, drawing in more funding than most other sectors. This trend has only intensified in 2025, with several key developments giving new momentum to an already strong funding landscape.

Major investments in companies like Elon Musk’s xAI, which is in talks to secure $10 billion, and Figure AI, negotiating a $1.5 billion raise, alongside innovations like Meta’s AI-driven humanoid division, have ignited even greater investor interest. Additionally, there’s been a shift towards practical AI solutions, prompting startups to ramp up AI development. This combination of factors has led to the most robust start to a year in the AI funding market’s history.

According to Crunchbase data, in just 45 days, AI startups raised a whopping $10.4 billion, $2 billion more than in the first three months of 2024. Even if there were no additional funding rounds by the end of the quarter, which is highly unlikely, Q1 2025 would remain the second-strongest first quarter for VC investments this market has ever seen.

To put this figure into perspective, it took only 45 days of 2025 for AI startups to raise half the value VC investors poured into this market throughout 2020, or one-third of the annual total in 2022 and 2023.

AI Startups Funding Outpaces Other High-Growth Sectors

It’s interesting to compare AI startup funding to other sectors that also attract significant VC investments. Since the beginning of the year, AI startups have raised three times more money than fintech startups ($3.3 billion), 40% more than semiconductor companies ($6.4 billion), and only $1.7 billion less than the biotech sector ($12.1 billion).

With $10.4 billion of fresh capital injected into the AI startup market, the total amount raised by these companies has surged to $287 billion. Around 65% of that value, or $189 billion, went to companies in the United States, with California leading the charge, proving the US leadership in the AI industry.

Asian AI startups raised the second-highest total, at $52.1 billion, while European companies follow with $34.5 billion. Crunchbase data also show that machine learning startups lead in funding activity, with $131 billion raised so far, followed by AI software companies at $83.4 billion.