While AI companies continue to pull in some big funding rounds, the venture capital industry as a whole remains in a prolonged slump this year, according to new data released by Crunchbase.
In the second quarter and the first six months of the year, the amount of venture capital deployed globally dropped by around 50% over the same periods last year, according to Crunchbase.
That means venture capital firms invested $65 billion from April to June this year, and $293 billion since the beginning of 2023, which is also a 10% decline from the second half of 2022.
Overall, both late- and early-stage funding amounts declined by nearly half in the second quarter of the year compared to 2022, according to Crunchbase. Seed rounds in particular dropped around 40% to $6.8 billion, the lowest quarterly value since 2021.
Artificial intelligence companies have captured close to one-fifth of all venture capital investments this year, nonetheless.
"It’s safe to say that without the AI fervor kicked off by the launch of OpenAI’s ChatGPT in November, venture funding so far in 2023 would have been even lower," the Crunchbase report said.
Some of the biggest AI rounds this year have been in the Bay Area.
On Thursday, Palo Alto-based Inflection AI announced a fresh $1.3 billion investment, although the deal was a combination of cash and cloud computing credits, according to various reports.
Inflection said the new capital brings its total funding to just over $1.5 billion, keeping it among the Bay Area's top funded generative AI startups alongside other companies like Anthropic, Scale AI, Adept AI, Dialpad and Grammarly.
Two other Bay Area startups raised $100 million each last week, as well: marketing software developer Typeface and chip technology developer Celestial AI.
Cupertino-based Vectara announced a $28.5 million seed round in June for its AI-powered enterprise search software.
Around half of all the new billion-dollar-plus valuations in North America this year are going to startups working on AI products and services, as well, including San Francisco-based Sigma Computing and Typeface.
