Venture capitalists are gobbling up term sheets for startups that specialize in artificial intelligence, while remaining selective when it comes to funding companies operating across the broad spectrum of technology.

According to new figures from analytics firm Dealroom, AI startups have raised a total of $110 billion in funding in 2024, a 62% increase from the previous year. At the same time, privately-backed companies (startups and scale-ups) across the entire technology sector raised $227 billion in 2024, down 12% from 2023 figures.

Yoram Wijngaarde, the founder of Dealroom, has been analyzing and advising in the tech industry for decades. Despite the significance of marketplaces in the late 1990s and early 2000s, nothing has come close to the impact AI has made on investing in terms of activity and value. “This is the biggest wave ever by absolute amounts invested,” he noted. “There’s never been anything like it.”

One reason for this surge is the wide range of industries being touched by AI, including hardware, infrastructure, applications, foundational models, and more.

A review of some of the biggest AI company raises in 2024 highlights the various areas that are currently attracting attention. Anthropic (Large Language Models, Generative AI), Waymo (self-driving), Anduril (defense), xAI (applications), Databricks (processing and managing data, especially AI data) and Vantage (data centers and infrastructure, fueled by the need to train and query data) are among the top ten biggest fundraisers of 2024.

Although OpenAI may be perceived as the poster child for AI at present, it did not raise the most money last year. OpenAI secured $6.6 billion, while Databricks secured $10 billion.

Despite securing the most total funding — more than $20 billion to date, with additional $40 billion reportedly in the works — and having a massively popular app in the form of ChatGPT, OpenAI has come to symbolize a kind of benchmark in the industry.

The Dealroom report was commissioned to coincide with a week of AI events in Paris around the French government’s AI Action Summit. The summit’s agenda includes a discussion of how to promote more equitable AI development across various markets, beyond the U.S.

Given that AI companies are believed to be under-funded outside the U.S., Dealroom’s figures reveal how that affects the distribution of VC investments. A total of 42% ($80.7 billion) of AI VC funding went to startups in the U.S., while 25% ($12.8 billion) went to European startups and just 18% to those in the rest of the world. China was the standout in 2024, with $7.6 billion invested.

“In Europe, there’s an innovators’ dilemma,” said Wijngaarde. “We don’t want to replace what we have and that can result in a less aggressive investment approach.”

How will 2024 AI funding play out in 2025?

One reason AI startups have received so much funding is due to the high costs associated with building and running these services: large language models need extensive computing infrastructure. The emergence of DeepSeek and other projects that built a rival to an OpenAI model for under $50 presents an alternative approach built on open-source principles. Will this be a trend that continues in 2025?

So far, the prospects for open-source companies have been modest, even with the presence of Mistral (which claims to be open-source) in Europe, and Meta’s efforts in the field.

Dealroom states that 12% of AI VC funding in 2024 went to startups building open-source AI. “However, there is considerable grey area regarding what constitutes open-source and not,” Orla Browne, its head of insights, noted. “For example, xAI is not included in these figures, as while Grok-1 was open-source, Grok-2 is not currently. With the inclusion of xAI alone, the percentage would rise to 22%.”

Beyond the magnitude of funding, for AI startups looking to match up with VCs that are most interested in AI, Dealroom found that Antler made the most investments in the field last year, followed by a16z, General Catalyst, Sequoia, and Khosla Ventures, rounding out the top five.