Artificial intelligence startups are playing a big role in US venture capital funding. As per PitchBook data reported by Reuters, the total capital raised in 2024 was nearly 30% higher year-on-year. AI startups bagged a record 46.4% of the total $209 billion raised in the previous year, compared to less than 10% a decade earlier. This means that venture capitalists put $97 billion into artificial intelligence startups in the US. Artificial intelligence technology has been garnering investor interest recently, a majority of which are very optimistic about the sector.
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“The AI/LLM companies did enjoy a historically rich funding environment. Most raised multiple rounds at exponentially higher valuations last year. They will need to smash very significant business milestones this year to continue enjoying unlimited access to infinity capital”.
-James Cross, managing director at Franklin Venture Partners.
In particular, AI companies like xAI, OpenAI, and Anthropic have led the way in funding. xAI has raised $6 billion in a May funding round and another $6 billion in December to develop its AI chatbot Grok. OpenAI has also raised $6.6 billion in October. Similarly, AI startup Anthropic is in talks to raise as much as $2 billion at a $60 billion valuation, CNBC has confirmed. The funding round is being led by Lightspeed Venture Partners. Anthropic, OpenAI, and other tech giants are in a generative AI arms race so that they don’t fall behind in a market that is predicted to top $1 trillion in revenue within a decade.
Many of these funding rounds share a common goal: advancing AI capabilities, with some aiming for the long-term vision of achieving AGI. However, Sam Altman, CEO of OpenAI, has said that Artificial General Intelligence (AGI) has become a sloppy term.
“If you look at our levels, our five levels, you can find people that would call each of those AGI, right? And the hope of the levels is to have some more specific grounding on where we are and kind of like how progress is going, rather than is it AGI, or is it not AGI?”
– Altman said.
Altman also referred to something called the ARC-AGI challenge, referring to it as “a North Star toward AGI”. The new AI model which OpenAI plans to introduce on Jan. 10 passes this challenge.
“They said if you can score 85% on this, we’re going to consider that a ‘pass,’ And our system — with no custom work, just out of the box — got an 87.5%. And we have very promising research and better models to come”.
-Sam Altman.
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10. Pony AI Inc. (NASDAQ:PONY)
Number of Hedge Fund Holders: N/A
Pony AI Inc. (NASDAQ:PONY) specializes in autonomous mobility, offering AI-driven robotruck and robotaxi services, intelligent driving software, and vehicle integration solutions. On January 6, Reuters reported that Pony AI Inc. is planning to expand its AI-powered robotaxi services in Hong Kong. The company aspires to expand its autonomous driving operations globally as it joins Baidu in a race to provide services in the city. Initially, it will offer its robotaxi commuting services to airport staff within Hong Kong International Airport before it ventures into other areas. The company has currently obtained robotaxi service licenses in Beijing, Shanghai, Guangzhou, and Shenzhen, and is also considering the deployment of its autonomous driving business in South Korea, Luxembourg, the Middle East, and other countries.
9. Zepp Health Corporation (NYSE:ZEPP)
Number of Hedge Fund Holders: 2
Zepp Health Corporation (NYSE:ZEPP) is a smart wearable and health technology company that offers intelligent healthcare tools. On January 6th and 7th, the company unveiled its latest smart wearables and health technology advancements at the CES Pepcom and ShowStoppers media events. Zepp Health revealed its integrated solutions for fitness, sleep, nutrition, hearing, and productivity, helping individuals live modern lifestyles while achieving balance and fulfillment. Some of the advancements showcased at the event include AI-driven personalized fitness plans through Zepp Coach, AI-driven sleep tracking with Zepp Aura, nutrition insights through Amazfit, advanced hearing solutions with Zepp Clarity, and much more. Amazfit, Zepp Clarity, and Zepp Aura are the company’s leading consumer brands.
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