Press release

16 May 2024 Dublin, IE

Generative AI Venture Capital Investment Globally On Track To Reach $12 billion in 2024, following breakout year in 2023

Dublin, 16 May 2024: As the Artificial Intelligence landscape continues to rapidly evolve, investment is pouring into Generative AI (GenAI), driving investment across traditional AI and the wider AI ecosystem, according to new research from EY Ireland.

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  • Global venture capital investment in Generative AI in Q1 2024 US$3 billion, forecasted to reach $12 billion for the year
  • Total GenAI 2023 investment $21.3 billion, underpinned by three major investments - OpenAI-Microsoft ($10bn), Anthropic-Amazon ($4bn) & Inflection-Microsoft ($1.3bn)
  • North America the location for overwhelming majority of GenAI investment to date, significant opportunity for Ireland and Europe in this rapidly expanding space.

Dublin, 16 May 2024: As the Artificial Intelligence landscape continues to rapidly evolve, investment is pouring into Generative AI (GenAI), driving investment across traditional AI and the wider AI ecosystem, according to new research from EY Ireland. Last year witnessed a remarkable surge in venture capital (VC) funds invested in the space ($21.3 billion), with $15.3billion of the 2023 total coming from mega investments made by Microsoft and Amazon. During the first quarter of 2024, $3 billion was invested globally and EY projects that, based on these trends continuing across the year, total global investment is on track to reach more than $12 billion in 2024. Excluding the mega investments noted above, this represents an increase of nearly 100% from the prior year.

As one of the most disruptive and transformative technologies in decades, interest in AI, especially GenAI, remains very strong, driven by an array of factors including unprecedented public interest and high early adoption rates of what is still a nascent technology. GenAI’s potential applicability across a wide variety of sectors and industries, as well as adoption potential across the c-suite is also driving investment as the sector matures. With an increasing switch from horizontal AI (i.e. general purpose & Large Language Models (LLMs)) to Vertical AI (specific & niche) investments predicted, the number of deals and investment is projected to only increase over the coming years.

Despite a slowdown in investment in many other industries over recent years due to interest rate increases, inflation and the shift back to more familiar lifestyle patterns following the end of the pandemic, VC interest in GenAI remains robust and has been on an exponential rise with $21.3 billion invested in 2023, compared to just c.$1 billion in 2018. When compared with 2022, investment funds were circa three times greater last year. This can largely be attributed to notable investments by major technology companies such as Amazon and Microsoft, who injected a combined USD$15.3 billion into pioneering AI companies such as OpenAI, Anthropic and InflectionAI.

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VC investment is also diversifying across sectors including healthcare, natural language interface, visual media, and vertical applications, growing from $77 million in 2018 to $5.1 billion in 2023 in AI Core (e.g. Large Language Models and Semiconductors) investments alone. Despite a handful of $100M+ mega-rounds in 2023, the GenAI space is still largely nascent, with more than 75% of GenAI start-ups being in early stages or not having raised any equity funding yet.

As 2023 progressed we saw some caution with regard to the business models of certain GenAI companies in particular those which had been surpassed quickly by next generation technologies, featurisation or a more efficient competitor. This led to a slight easing of VC deals in certain areas towards the end of the year. Investors and industry experts, however, have indicated the need for a long-term perspective, acknowledging that GenAI is still in its early stages and so this can likely be taken as a sign of an industry entering the next phase of its development.

North America is leading the way both in terms of deal count and deal value within the GenAI landscape, followed by Europe. US-based tech companies and hyperscalers are investing heavily in start-ups and emerging leaders in the field of Generative AI. Whilst the initial investment focus has been centred primarily in the United States, there have been signs that investors are increasingly looking at European companies to diversify and to find good opportunities that match their investment criteria. Ireland is in a very good position to attract such VC investment given its vibrant technology and life science ecosystem, business friendly policies and availability of talent.

Grit Young, EY Ireland Valuations Partner, said: “While investment in GenAI has been on a rapidly expanding trajectory since 2018, last year was a breakout year for the sector and this momentum is continuing in 2024. CEO surveys, investor calls and an increasing number of financial statement disclosures suggest that AI remains central to the future growth strategies of many and varied businesses. We are anticipating that this investment will accelerate in 2024, albeit a significant percentage of this investment will be spent internally and outside the public gaze. Moreover, the investment in GenAI is in turn driving investment across traditional AI and the wider AI ecosystem, including chips, data centres and underlying technology.

“In comparison to some other widely publicised technologies over recent years, GenAI has already shown that it can deliver tangible benefits over relatively short periods of time. Companies who were first to invest in embedding the technology are those that are on track to demonstrate gains to shareholders which in turn will create a virtuous cycle. When companies are under pressure to show progress or to respond to a truly disruptive technology, it can happen that some feel tempted to rush to implement the new technologies before they are fully ready to do so. This, in turn, could leave them exposed to significant risk, both regulatory and reputationally, and it is something that markets, regulators and customers will be watching closely.

“From a geographical perspective, Europe currently lags behind the US in terms of investment in AI, but there is real optimism about the potential here in 2024 and beyond. France has shown with Mistral that it can produce an AI unicorn that is looking to take on Open AI and other US incumbents. Deepmind, one of the pioneers of foundational models, was founded in the UK and just recently we saw an investment of more than $1 billion into UK-based AI self-driving startup Wayve. There is ample opportunity for Ireland and Europe to emerge as a frontrunner in GenAI innovation and development, particularly with its first mover advantage gleaned from the EU AI Act.

“As the market matures and LLMs become more sophisticated along with the financial investments required growing ever larger, attention is shifting from horizontal AI to Vertical AI. Recent announcements on European headquarters of a number of key AI players here in Ireland is very welcome in this regard. With start-ups increasingly focusing on vertical AI applications, it’s essential that we are providing the right supports and capital to nurture and retain the next generation of corporate technology champions here.”


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In conducting this research, EY utilised a rigorous methodology to ensure accuracy and reliability. The data collection methodology employed is outlined below:

  • Utilising reputable financial research platforms such as Pitchbook and S&P Capital IQ, we gathered comprehensive data on investment trends, market dynamics, and emerging technologies within the AI sector
  • The GenAI companies have been considered and classified as per the report “Artificial Intelligence & Machine Learning Public Comp Sheet and Valuation Guide Q3 2023.” The data collected related to the following segments of AI:
  • AI Core: These entities specialise in crafting and providing tools and platforms to oversee the model lifecycle, encompassing data management, infrastructure, and comprehensive platforms for model development, deployment, and administration
  • Natural language interface: Enterprises within this sphere focus on developing software applications facilitating user-computer interactions through natural language. Utilising AI algorithms, these applications process, comprehend, and generate human language in real-time.
  • Vertical Applications: These organisations concentrate on crafting generative AI solutions tailored to specific industries or applications, rather than broad, horizontal applications. Their software streamlines processes and enhances outcomes for businesses within these targeted sectors or functions.
  • Biotechnology: Businesses in this field leverage artificial intelligence to analyse extensive biological data, identify novel targets, and optimize drug design. Harnessing machine learning algorithms, they expedite research and development of pharmaceuticals, biologics, and other products, aiming to accelerate drug discovery and reduce costs associated with pre-clinical testing and clinical trials.
  • Audio: Entities operating in this sector specialise in recording, manipulating, and reproducing sound, speech, and music. Applications span human-machine interaction, music and film production, podcasts, audiobooks, and related content creation.
  • Media: This category covers companies creating digital content for various applications including marketing, design, entertainment, e-commerce, virtual reality, gaming, and more. They produce immersive experiences in both 2D and 3D

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