AI | Photo Credits Science Business

The artificial intelligence(AI) boom takes on new heights as data shows that investors have poured $20 Billion into AI startups alone since the year began as more startups and investors continue to come on board and join in on the trend.

AI Startups Attract Record-Breaking Investments

Companies from various sectors all want some part in the AI buzz as they redefine themselves to include the technology which is growing at an exponential rate. In addition to that, more entrepreneurs are establishing companies in AI seeing as investors have made clear their interest in the technology.

According to an analysis by Crunchbase on startups in AI this year, venture firms have spent over $20 billion in 2023 on these companies with predictions that much more money will continue to be invested in AI startups.

One such startup is Mobius AI which was formed by four former AI researchers at Google. Jonathan Ho, William Chan, Chitwan Saharia, and Mohammad Norouzi all left the tech giant to co-found a company with no idea of what product they would provide other than the fact that it would generate its own images and videos.

However, in a week, the startup had drawn the attention of two major venture capital firms in Silicon Valley, Andreessen Horowitz and Index Ventures, who came in with a funding offer. Soon, the startup was worth $100 million at barely two weeks old and without a product.

Despite the unusual growth, more investors came in to offer more money to the team of four. Many other companies have a similar start-up story as investors compete to have shares in the most AI startups possible.

Some of the recent firms to benefit from this investment frenzy are and Anthropic who early last week raised $700 million combined in their most recent funding rounds.

First is ChatGPT competitor Anthropic, which raised $450 million in Series C funding headed by Spark Capital with participation from Google, Salesforce Ventures, Sound Ventures, Zoom Ventures, and others.

The deal follows earlier reports from February that Google had cnotributed about $300 million to $400 million to the startup, which developed AI Assistant Claude. Claude is where Anthropic stands out. It can supports up to 100,000 tokens, meaning its memory can handle greater than 10 times more text than ChatGPT’s GPT-4.

In March, there were more reports that Anthropic was raising an additional $300 million at a pre-investment valuation of $4.1 billion.

On the other hand,, based in London, raised more than $250 million in a Series D round backed by Qatar Investment Authority. Iconiq Capital, Jungle Ventures, and Insight Partners were some of the additional investors, bringing its valuation up 1.8 times what it was last year.

In addition to the duo, Insider, a Turkey-based AI marketing platform, also secured $105 million a day after Anthropic and The round was led by’s Series D lead, Qatar Investment Authority, which clearly will not be left behind in this investment race.

Investors Yet to See Profits

Valuation at IPO vs Recent Market Caps | Photo Credits Crunchbase

Despite the billions, the AI space is seemingly not panning out as expected and the public markets may not have the same level of interest in a sector just because it is trending.

Based on an analysis of highly regarded AI-focused startups that went public in the quarters prior to the market peak’s performance, focusing on AI does not equate to stock market growth.

Most of the startups that went public are currently valued at about 25% of their IPO valuation which shows that investors are yet to profit from the massive investments they continue to make in the technology.

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