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Global AI deal volumes reached 1,245 during Q3 2024, a level not seen since Q1 2022 reflecting how confident and resilient investors are about investing in AI.
With a 24% year-over-year growth, global AI deals far outpaced the -10 % quarter-over-quarter (QoQ) declines across the broader investment market. CB Insights notes in its State of AI Q3’24 Report that despite broader venture trends slowing down, investor resilience and confidence in AI remain strong.
CB Insights says that “while AI deals in Q3’24 included massive $1B+ rounds to defense tech provider Anduril and AI lab Safe Superintelligence, global AI funding actually dropped by 29% QoQ.” The 77% decline in funding from $1B+ AI rounds QoQ contributed to the 29% QoQ decline.
The average AI deal size increased 28% this year, climbing from $18.4M in 2023 to $23.5M. Deal size gains this year are attributable to five $1B+ rounds this year, including xAI’s $6B Series B at a $24B valuation, Anthropic’s $2.8B Series D at an $18.4B valuation, Anduril’s $1.5B Series F at a $14B valuation, G42’s $1.5B investment from Microsoft and CoreWeave’s $1.1B Series C at a $19B valuation. CB Insights notes that these deals alone aren’t responsible for increasing the average entirely on their own, mentioning that the median AI deal size is up 9% in 2024 so far.
U.S.-based AI startups attracted $11.4B in investment across 566 deals in Q3, 2024 accounting for over two-thirds of global AI funding and 45% of global AI deals. European AI startups attracted $2.8B from 279 deals, and Asian AI startups received $2.1B from 316 deals.
AI deal volumes reach 1,245 in Q3 2024, marking the highest level since Q1 2022 amid resilient investor interest. Source: CB Insights, State of AI Q3 2024 Report.
Generative AI and industry-specific AI lead investments
The anticipated productivity gains and potential cost reductions that generative AI and industry-specific AI are delivering are core to investors’ confidence and driving more AI deals.
Enterprises have already learned how to prioritize gen AI and broader AI investments that deliver measurable value at scale. That’s one of the primary factors continuing to fuel more venture investments over other opportunities. Gartner’s 2024 Generative AI Planning Survey reflects how impatient senior management is for results, correlating back to CB Insight’s findings.
One of the key findings from the Gartner Survey is that senior executives are expecting—and driving—gen AI projects to boost productivity by 22.6%, outpacing revenue growth at 15.8% and cost savings at 15.2%. While cost efficiency and revenue gains matter, Gartner predicts the most immediate and substantial impact will be on driving greater operational efficiency. Gartner predicts that enterprises that prioritize gen AI integration will see significant increases in both workflow optimization and financial performance.
Projected impact of generative AI on productivity, revenue, and cost savings over the next 12–18 months. Source: Gartner Generative AI 2024 Planning Survey
CB Insights provides a comprehensive analysis of the deals completed in Q3, reflecting the growing dominance of gen AI and industry-specific AI investments. The following deals support this finding:
Gen AI investments in Q3:
- Safe Superintelligence raised a massive $1 billion Series A round, indicating continued strong interest in large language models (LLM) and general-purpose AI systems.
- Baichuan AI, a Chinese generative AI company, secured $688 million in Series A funding.
- Moonshot AI, another gen AI startup, raised $300 million in a Series B round.
- Codeium, a code generation AI company, became a unicorn with a $150 million Series C round.
Industry-specific AI investments in Q3:
- Anduril, an AI-powered defense technology company, raised $1.5 billion in a Series F round, highlighting interest in AI for national security applications.
- ArsenalBio secured $325 million for AI in biotechnology and drug discovery.
- Helsing raised $488 million for AI applications in defense and security.
- Altana AI received $200 million for AI in supply chain management and logistics.
- Flo Health raised $200 million for AI-powered women’s health applications.
New AI unicorns more than doubled in Q3
Gen AI continues to be one of the primary catalysts driving the formation and growth of unicorns (private companies reaching $1B+ valuations). CB Insights found that the number of unicorns more than doubled QoQ, reaching 13 in the latest quarter. That’s 54% of the broader venture total for Q3 2024.
More than half of the AI unicorns launched last quarter are gen AI startups. They’re targeting a broad spectrum of areas, including AI for 3D environments (World Labs), code generation (Codeium), and legal workflow automation (Harvey). Among new GenAI unicorns in Q3’24, Safe Superintelligence,
