AI Startup Investments Outpace VC-Backed Exits

Venture firms are reportedly finding that when it comes to artificial intelligence (AI) startups, there is more money going into investments than there is money coming out of exits.

In the first half of the year, the amount raised by AI startups in the U.S. totaled $104.3 billion, while venture capital (VC)-backed exits totaled $36 billion, CNBC reported Tuesday (July 22), citing data from Pitchbook.

In fundraising, the biggest deals during the first half included OpenAI raising $40 billion in March, Scale AI getting $14.3 billion as Meta hired away its CEO and some staffers, Anthropic raising $3.5 billion and Safe Superintelligence raising $2 billion, according to the report.

The 281 VC-backed exits recorded during the first half of the year included the $700 million acquisition of EvolutionIQ by CCC Intelligent Solutions and the public listing of Slide Insurance, per the report.

Meta’s investment in Scale AI “amounted to a lucrative exit of sorts for early investors,” the report said.

“The dominant exit trend right now is frequent but lower-value acquisitions and fewer IPOs with significantly higher value,” Dmitri Zabelin, senior research analyst for AI and cybersecurity at Pitchbook, told CNBC.

It was reported in March that excitement for AI had brought American startup investment to a three-year high but that much of this funding from the VC space had been focused on a few very large private tech firms.

“AI is a transformative force that makes these companies better,” Hemant Taneja, CEO of General Catalyst, one of the biggest VC firms in Silicon Valley, told the Financial Times (FT) in March. “The way to think about it is ‘can these businesses reasonably grow 10x from where they are?’ The answer with all of these is yes, so they are reasonably priced.”

S&P Global Market Intelligence reported in March that many VC investors had turned their focus to companies in generative AI in search of growth rates and higher valuations.

“With AI ‘revolutionizing’ multiple industries, venture capital is flowing where the next big breakthrough is expected,” John Clark, partner with investment bank Royal Park Partners, said in the report.

HSBC Innovation Banking said in December that 42% of U.S. venture capital was invested into AI companies in 2024, up from 36% in 2023 and 22% in 2022.

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