AI Startups have played a significant role in transforming how businesses and startups operate, from healthcare to sales to software development. The AI Industry is also estimated to reach a milestone of $738.80 billion by 2030. The rise of AI has forced the world to adapt to the new change and introduce automated tools in business. This article will explore statistics related to AI startups in 2024, including their market growth, funding statistics of AI startups, their struggles, and more. So, let’s begin.
Top AI Startup Statistics
- Thousands of engineers are launching their own AI products. Among those, there are more than 70,000 AI startup companies worldwide.
- Around 115 million companies have adopted AI technology in their business.
- The US has the most AI startups.
- Around 45% of companies are exploring AI technology to automate tasks.
- Investors are investing aggressively in AI startup companies.
- The AI funding has increased by 7x times between 2015 – 2019.
- Global VC has funded over $120 billion in AI startups.
- China holds the record in AI deployment (58%) compared to other countries.
- China alone takes up $43.4 billion in AI funding.
- Five countries are leading in AI startups, including the USA, China, India, the UK, and Israel.
- Three roles have the highest demand in the market. They are Machine Learning Engineers, Data Scientists, and AI Researchers.
Thousands of AI Startups Have Come Forward To Change the Industry Trajectory in 2024
The data has shown that 70,000 AI startups have launched in the last ten years. A large percentage of AI startups are coming from the United States of America. The country’s education system and laws encourage the students to focus on innovation and support the cause by offering several options. Many top-tier innovative companies have been tested and launched after a trial in the universities. It is one of the reasons why Meta, DropBox, and industry-changing services have younger founders.
| Country Name | Percentage (%) |
| United States of America | 25% |
AI Market Size and Growth
AI is no longer a distant technology. Every industry, including small businesses, wants a piece of it. While some AI startups focus on developing a new service or product, some want to deploy the outcome in their business. The previous stats show the growth of AI market size in 2022 was less than $86.9 billion. The AI market size is projected to reach $1.8 trillion by 2030.
Businesses worldwide have witnessed the potential of Machine Learning and Deep Learning models. Everyone is heavily investing in AI companies in 2023, and the funding has reached $97 billion.
VC investors are not hesitating to invest money in AI startups, as the stats indicate that AI startups have raised over $40 billion in 2023.
| Subject | Year | Value in ($ Billions) | Notes |
| AI Market Size | 2022 | $86.9 billion | – |
| Projected AI Market Size | 2030 | $1.8 trillion | – |
| Demanding AI Technology | – | – | Machine learning, natural language processing, speech recognition, biometrics, Robotic process automation, etc. |
Leading Application Sectors for AI Startups
Over 33% of the companies focus on specific industries, such as autonomous vehicles, retail, healthcare, finance, etc. AI is transforming the healthcare industry with medical diagnosis, robotic surgery, and drug discovery. The AI models analyze the medical images and find the small details leading to disease detection.
E-commerce websites have implemented AI models to recommend new products. E-commerce platforms have deployed AI to detect fraud, manage inventory, and optimize prices.
| Sectors | Information |
| Autonomous Vehicles | Computer vision, predictive modeling |
| Finance | Fraud detection, risk management, investment advice |
| Healthcare | Medical imaging, medical diagnosis, drug discovery |
| Manufacturing | Predict equipment failures, enhance quality control, optimize production processes. |
1/3 of the AI companies are industry-specific.
Cross-industry AI developments take 40% of the market. These include AI assistants, climate tech, general-purpose AI tools, Human-Machine Interfaces (HMI), etc.
Meanwhile, 27% of AI companies are developing AI tools to improve productivity. These tools include data management tools, Machine Learning Frameworks, model development tools, model optimization tools, model serving platforms, etc.
| Category | Startups (%) | Information |
| Industry-Specific | 33% | Autonomous vehicles, manufacturing, finance, healthcare, etc. |
| Cross-Industry | 40% | AI assistants, climate tech, general-purpose AI tools, Human-Machine Interfaces (HMI), etc. |
| AI Development Tools | 24% | Data management tools, Machine Learning Frameworks, model development tools, etc. |
Leading AI Startup Funding Statistics: Which country has received the most funding so far?
Venture capitalists and MNCs are investing aggressively in AI startups. The USA is ahead in the race with $44 billion in investments. With the highest AI deployment in the world, Chinese AI startups have secured a whopping $43.3 in funding. India, the UK, and Israel are not standing behind and securing $1 – $2 billion each to place third in the race.
| Category | Funding ($) | Information |
| Global AI Funding | $120 – $140 billion | Venture Capitalist AI Investments |
| United States of America | $44 Billion | #1 in AI startups and investments. |
| China | $43.3 Billion | China is placed #2 in the AI tech race. |
| India, UK, and Israel | $1 – $2 Billion each | Worthy contributors. |
| Autonomous Driving | $5 – $7 Billion | – |
| Healthcare | $4 – $6 Billion | Improving disease detection and drug discovery tech. |
| Enterprise | $7 – $10 Billion | Improving productivity. |
| VC Firms Investing | $1.8 Billion | Softbank Group, Sequoia Capital, GV, M12 (Microsoft’s Venture Fund), etc. |
| Median Seed Funding | $2.5 Million | Individuals or entrepreneurs.. |
| Median Series A | $15 Million | – |
| AI Startup IPOs | 4 – 6 Projects | May raise up to $40 billion. |
AI Companies By Region
China has an impressive 58% AI deployment rate in the world. India stands in second place with a 57% AI deployment rate. In 2022, the USA is behind in the race with a 25% AI deployment rate. Of course, every country has its way of making a dent in the Artificial Intelligence market.
| Country | Exploration (%) | Deployment (%) | Combined |
| China | 30% | 58% | 88% |
| Singapore | 46% | 39% | 85% |
| India | 27% | 57% | 84% |
| Italy | 41% | 42% | 83% |
| UAE | 40% | 38% | 78% |
| Germany | 44% | 34% | 78% |
| Global | 42% | 34% | 76% |
| Spain | 45% | 31% | 76% |
| Canada | 48% | 28% | 76% |
| France | 44% | 31% | 75% |
| United Kingdom | 47% | 26% | 73% |
| Latin America | 43% | 29% | 72% |
| United States | 43% | 25% | 68% |
| Australia | 44% | 24% | 68% |
| South Korea | 46% | 22% | 68% |
Demographics of AI Startups
Many AI startups in the United States receive funding from investors. In 2023, the United States startups received marginally higher funds than China, the European Union, and the United Kingdom combined. Several Chinese Generative AI startups earned higher funding when compared to the rest in the first half of 2023.
Number of AI startups by region:
| Region | Number of Startups |
| North America | 7,522 |
| Europe | 3,569 |
| Asia | 2,686 |
| South America | 1,027 |
| Africa | 393 |
Number of AI startups by country:
| Country | Number of Startups |
| United States | 5,749 |
| China | 1,152 |
| United Kingdom | 1,024 |
| India | 767 |
| Israel | 533 |
These AI Startups Received the Most Funds From VCs
OpenAI stands tall in receiving investments in the early stages of the project. Sam Altman led OpenAI and changed the course of the world with ChatGPT. Microsoft jumped in the pool to get their hands on the technology. Let’s look at which AI startups received investments from VCs worldwide.
| Company Name | Valuation | Funds Raised | Year Founded | Focus Area |
| OpenAI | $29 Billion | $11.3 Billion | 2015 | R&D in a large language model chatbot. |
| Anthropic | $4.1 Billion | $1.5 Billion | 2021 | AI safety, Interpretable AI, Common Sense Reasoning, and Claude Family of Large Language Models. |
| Inflection AI | $4 Billion | $1.5 Billion | 2022 | Personal AI development, Multifaceted Functionality, Conversational AP, and Public Benefit Corporation Structure. |
| Tempus | $8.1 Million | $1.3 Billion | 2015 | Library of Clinical and Molecular Data |
Identifying a Viable Market Need for AI Startups
IBM’s ‘Entrepreneurial India’ Study reports suggest that 99% of startups fail due to a lack of innovation. AI startups are no different from the rest of the failed businesses. There are a few key points on how to build a successful startup.
Identify the customer pain points or problems and solve them through the product.
Conduct various testing phases and trials before launching the startup company.
The small team shouldn’t hesitate to conduct A – B testing until they get good results.
Talent acquisition is a key factor in building a successful company.
The AI startup required a leader with formal mentoring, business ethics, and an open-minded mindset.
| Subject | Key Points | Case |
| Identifying Problems | Identify customers’ real problems.Validate the problems through research and feedback. | – |
| Building Solutions | Create one competitive advantage.Build technical and business skills. | Unacademy – 50m users, $881M funding. Grammarly – 30m users, $200m funding.ChatGPT – 10m users, $100m funding. |
Here are a few use cases.
| Startup | Number of Users | Funding | Product |
| Unacademy | 50 Million | $881 Million | Education |
| Grammarly | 30 Million | $400 Million | AI Writing Assistant |
| ChatGPT | 180.5 Million | $2.75 Billion | Large Language Model |
| Casetext | 5,000 | $50 Million | Legal research. |
| Zipline | 1 million deliveries | $225 Million | Medical drone deliver |
Some of the Struggles AI Startups Are Facing in 2024
- Artificial Intelligence will be a lucrative industry in 2024. And the situation will remain the same for this decade.
- AI startups don’t have enough experienced talent to produce results.
- The demand for AI engineers or related talent has exceeded 58% in 2022.
- Startups can’t match the big-time companies. MNCs have monetary resources and the capacity to offer higher salaries.
- Machine Learning and Deep Learning require higher computing infrastructure. AI startups spend loads of capital in fueling the computing power.
- ML and DL research and development add more cost.
- Most startups don’t have the workforce and capital to meet the hype.
- Several countries have started to impose laws on AI models.
- The biggest challenge is to explain and interpret AI models.
AI Startups FAQ’s
Is innovation necessary to succeed in the AI race?
Yes. 85% of AI startup CEOs believe that innovation is vital to surviving in the future.
Can AI startups comply with government regulatory compliance?
Yes. Every AI startup company has to comply with government bodies and regulations.
How many jobs will AI claim in the next five years?
Two-thirds of the jobs in the United States can be partially automated using AI solutions. Learning to use AI tools can lead to a stable career.
At what percentage of employers prefer AI instead of hiring new employees?
40% of companies are considering using AI instead of hiring new employees.
Will AI replace marketing teams?
AI won’t replace the marketing teams, but the employees should learn to use them to increase productivity.
How many Fortune 500 companies have adopted AI?
Around 80% of Fortune 500 companies have adopted GPT in their business by August 2023.
What is the age group of Generative AI users?
Around 20% of the Generative AI users are aged 25 – 35.
