Observed Signal · Jun 19, 2023 · Research Report · Source: Trending Topics · Impact: 3/5 · Sentiment: Negative
AI Startup Funding Declined 49% in 2023
According to a study by Sortlist, the number of investor-backed AI startups fell by 49 percent in 2023. New AI startup creations dropped 69 percent year-on-year in Q1 2023, from 668 to 269 companies worldwide, with Europe and Asia seeing a 77 percent decline. Despite fewer companies getting funded, total Q1 2023 AI investment reached $15 billion, up 10 percent year-on-year, driven mainly by Microsoft's $10 billion investment in OpenAI. AI sector mergers and acquisitions fell 23 percent in Q1 2023 to 77 deals, compared with 100 in Q1 2022. Microsoft's stock rose 16 percent following its OpenAI collaboration, making the investment worth over $200 billion by April 2023, while Google's Bard failed to generate comparable momentum.
Provides a comprehensive market analysis of AI startup funding and M&A trends, signaling a significant slowdown in AI investment activity that impacts the broader AI innovation ecosystem, including MarTech and AdTech applications.
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Key Takeaways & Evidence Grounding
- A Sortlist study found that the number of investor-backed AI startups fell by 49% in 2023 compared with 2022.
- New AI startup creations dropped 69% year-on-year in Q1 2023, from 668 to 269 companies.
- AI startup funding reached $15 billion in Q1 2023, up 10% year-on-year, driven by Microsoft's $10 billion investment in OpenAI.
- AI sector M&A declined 23% in Q1 2023 to 77 deals, down from 100 in Q1 2022.
- Microsoft's $10 billion OpenAI investment was worth over $200 billion by April 2023 following a 16% rise in Microsoft's stock.
Connected Companies & Entities
8 Entities mapped“Microsoft decided to invest ten billion dollars in the AI system OpenAI in January 2023....”
“A new study by Sortlist found around 49 percent fewer investor-backed AI startups in 2023....”
“Tech giant Microsoft decided to invest ten billion dollars in OpenAI in January....”
“Google could not live up to the hype around its own AI service Bard....”
“Among the best-known acquisitions in Q1 2022 were AI Music by Apple and Troops by Salesforce....”
“Among the best-known acquisitions in Q1 2022 were AI Music by Apple and Troops by Salesforce....”
“Sortlist analyzed data from platforms such as Crunchbase and GitHub for the study....”
“Sortlist analyzed data from platforms such as Crunchbase and GitHub for the study....”
Ontology Mapping & Concepts
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