The data is in, and AI startups captured 41% of the $128 billion in venture capital raised by companies on Carta last year — a record-high share. Investors have been actively providing capital to AI startups, resulting in 10% of startups receiving half of the funding.
Among the notable startups were Anthropic, OpenAI, and xAI, raising significant amounts at high valuations. xAI raised $20 billion in Series E funding in January, and OpenAI followed with a $110 billion round in February, moving closer to a $1 trillion valuation.
Anthropic raised $30 billion in a Series G round last month, valued at $380 billion. OpenAI and Anthropic were major contributors to the $189 billion in global venture capital raised last month. OpenAI, Anthropic, and xAI have suggested potential IPOs for later this year, attracting strong investor interest.
The venture market is now divided, with capital focused on a few firms supporting select companies while others struggle. Peter Walker from Carta mentioned that while it’s harder to raise funding, rounds are bigger due to the high costs of running AI models.
Carta data shows funds raised in 2023 and 2024 have the highest internal rate of return (IRR) since ChatGPT’s launch in late 2022, a positive sign for the funds backing emerging AI startups.
Walker noted young funds have strong IRR, but factors like the appearance of high returns can be due to the valuation increases in subsequent funding rounds. He also noted that recent funds likely contain more AI startups than those from 2020/2021.
Whether this early enthusiasm will lead to real returns through IPOs or acquisitions, or if it’s a temporary bubble, remains to be seen.