Funding in AI startups subdued, at over $50 bn in 2022

By Saurav Mukherjee

  • 13 Mar 2023
Credit: 123RF.com

With the rise of artificial intelligence (AI) in the global market, it has caught the attention of venture capital (VC) investors.

According to leading data and analytics firm GlobalData, 3,198 AI startups received $52.1 billion funding across 3,396 VC funding deals during 2022.

However, GlobalData’s Financial Deals Database reveals 2022 experienced a subdued VC funding activity across sectors, while the AI space too felt the brunt of a dent in investor sentiments. In comparison to 2021, VC funding deal volume as well as value in the AI space declined in 2022, but the impact was more prominent in terms of value.

“The number of VC funding deals announced in AI space globally declined by 4% in 2022 compared to the previous year, whereas the corresponding deals value was down by a massive 41.8%," GlobalData's lead analyst Aurojyoti Bose said.

As per her analysis, the AI deal volume experienced a fluctuating quarter-on quarter (Q-o-Q) trend throughout 2021 and 2022. However, there was a rebound in both VC funding deals volume and value in Q4 2022.

Some of the notable VC deals announced in the AI space during 2022 include $1.5 billion fundraising by Anduril Industries, $580 million raised by Anthropic, and $500 million fundraising by Black Sesame Intelligent Technology.

“The subdued VC funding activity in the AI space seems to be for short-term while long-term prospects are likely to be promising and the rebound in both deals volume and value in Q4 2022 could be seen as an indication of it," Bose concluded.