AI captured 37% of venture funding and 17% of equity deals in 2024.

A record $100 billion was raised globally in the AI sector last year, the only major sector among fintech, retail tech and digital health that has not remained stagnant, Benjamin Lawrence, senior lead analyst, said during CB Insights’ “Venture Capital Outlook” webinar on Jan. 9, at which the market intelligence firm presented its “State of Venture 2024 Report.”

“AI has reshaped the venture landscape,” he said.

Top applications for AI in 2024 were:

• Autonomous agents and digital coworkers; and
• Generative AI for customer support operations.

While AI investments were strong, fintech deals fell 19% year over year to $33.7 billion, or 3,580 deals, according to the report. As deals fell on an annual basis, fintechs did see an uptick in funding to $8.5 billion in Q4 2024, up nearly $1 billion sequentially.

Leading fintech deals in Q4 include:

• $300 million series B investment in payment platform Splitero;
• $300 million series E investment in digital banking application Uala; and
• $267 million series F investment in payments provider Zeps.

State of play

Total global venture funding increased 4% year over year in 2024, reaching $274.6 billion compared with $262.8 billion in 2023, Lawrence said, adding that “the annual increase is largely driven by AI.”

However, “We are still in a venture funding drought,” he said, as the fintech sector’s funding share fell 20% YoY to $33.7 billion.

Several macroeconomic factors contributed to slow investment outside of AI:

• High interest rates;
• Geopolitical tensions;
• Long-term uncertainty; and
• More stringent investors.
• Deal-making plunges

Most venture funding sectors struggled to make deals in 2024, the worst year in the past decade, causing cumulative deal values to fall and total deals to drop 19% year-over-year to 27,000, Lawrence said in the webinar.

In major deal-making regions globally, which CB Insights defines as areas averaging more than 500 deals per year, China saw the biggest slump in 2024, recording a 33% YoY drop, he said.

Meanwhile, U.S. venture capital funding reached a record $190.4 billion in 2024, a 30% increase from 2023, driven by AI investment, according to data management company DealRoom.

Top AI deals

Despite a decline in deal-making, AI constituted 17% of 27,000 equity deals in 2024, including five of the largest, Lawrence said. AI deal volume was also above 4,000 for the fourth time in a row, according to the Jan. 7 report.

The largest AI deals in 2024 include:

• $10 billion raised by Databricks;
• $6.6 billion raised by OpenAI;
• Two funding rounds which raised $6 billion in total by xAI;
• $5.6 billion raised by Waymo; and
• $4 billion raised by Anthropic.

“The question going forward is whether we will see funding … continue its growth in 2025 for AI or will [it] eventually subside,” Lawrence said. “It would not surprise me if we are currently at the peak of the AI bubble.”

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