Funding for AI and cloud-based companies in the United States, Europe, and Israel is experiencing a revival after three years of decline, with projections suggesting it will reach $79.2 billion by the end of 2024, as reported by venture capital firm Accel. This represents a 27% increase from the $62.5 billion invested in 2023. Generative AI is a significant driver of this trend, accounting for approximately 40% of the investments made this year.
Out of the $56 billion allocated to generative AI over the last two years, 80% was directed toward US companies, while the remainder was shared between Europe and Israel. In the United States, leading funding rounds included OpenAI, Anthropic, and Elon Musk’s xAI, whereas Europe saw notable investments in companies such as Mistral, Aleph Alpha, and DeepL. AI foundation models captured two-thirds of the total AI investments during this timeframe.
Investment in generative AI in Europe is rapidly increasing, growing from $2.4 billion in 2023 to $6.4 billion in 2024. In contrast, the US private AI sector attracted $25 billion in funding in 2024. Accel also pointed out that outside the AI realm, the technology industry is increasingly prioritising profitability, indicating a shift away from an era defined by rapid growth in software.