A report from Silicon Valley Bank highlights that AI investments are taking over venture capital, with AI-focused funds accounting for 40% of U.S. VC fundraising in 2023. This surge is largely due to substantial funding rounds in the AI sector, overshadowing non-AI ventures, which have seen investment flatline. With tight exit conditions still affecting the market and major AI companies focusing on private valuations over IPOs, the funding landscape continues to heavily favor AI startups, leaving traditional ones at risk of becoming 'zombiecorns.'
“Exclude AI investment and the story changes. There is no meaningful uptick for companies not leveraging AI, with investment from this group essentially flat for the last year.”
“Despite commanding sky-high private valuations, many AI players have no immediate plans to go public, limiting venture firms' ability to realize gains.”
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