Startup Trends: Funding pours into AI firms

Venture capital continues to flow into AI firms, as investors fund large rounds for several prominent companies. Through September of this year, 35% of startup investment has gone to AI-related companies, according to Crunchbase. Leading tech companies, including Amazon, Google, Microsoft, and NVIDIA, are investing in AI companies alongside VC firms.

Here are several prominent AI firms that recently announced significant funding rounds.

Perplexity, an AI search company

Perplexity, an AI search company, is in fundraising talks to raise as much as $500 million, according to The Wall Street Journal. The paper reported that the San Francisco-based company has already raised three rounds of funding in the past year, and the latest round would double the company’s valuation to $8 billion.

In January, the company announced a $73.6 million Series B funding round, with investors including IVP, NEA, Elad Gil, Nat Friedman, Databricks, NVIDIA, and Jeff Bezos.

Perplexity allows users to answer questions with information on the internet, explore topics in depth through its Copilot feature, and interact with their own data to find information.

Perplexity’s Forge Price™ is $119.23 as of November 12, 2024, giving it an implied valuation of $3.01 billion, unchanged from its last funding round in August 2024.

OpenAI, the operator of ChatGPT

OpenAI, creator of the ChatGPT chatbot and member of the Private Magnificent 7, closed a $6.6 billion funding round in October, Reuters reported. The funding could value the company at $157 billion and make it one of the most valuable companies in the world. Returning investors Microsoft, Thrive Capital, and Khosla Ventures participated in the funding round, joined by new investor NVIDIA, the article reported.

ChatGPT’s introduction in late 2022 helped launch the generative AI frenzy. The San Francisco-based company also owns the DALL E image generator. Over the past year, ChatGPT has doubled its growth to reach more than 200 million weekly active users.

OpenAI’s Forge Price™ of $295.90 as of November 12, 2024, gives it a valuation of $171.6 billion, a 9.4% premium to its last funding round.

Anthropic, an AI safety and research company

Anthropic, creator of the Claude AI assistant, is in talks to raise funds that would give it a valuation of up to $40 billion, SiliconAngle reported in September.

The San Francisco-based company was founded by siblings Dario and Daniela Amodei, former employees of OpenAI. In addition to Claude, Anthropic’s team of researchers, engineers, policy experts, and business leaders are working to build AI systems that people can rely on and generating research about the opportunities and risks of AI. Major investors in Anthropic include Google, Amazon, Salesforce Ventures, Spark Capital, and Menlo Ventures. Amazon alone has invested $4 billion in Anthropic.

Anthropic’s Forge Price™ of $36.01 as of November 12, 2024, gives it a $22.1 billion valuation, a 20% premium to its last funding round in March 2024.

Scale AI, which provides data labels to train AI applications

Scale AI, a data-labeling provider for AI firms and member of the Private Magnificent 7, raised $1 billion in a Series F round from investors including Amazon and Meta, according to TechCrunch. According to the article, the funding values the company at $13.8 billion.

Other investors in the latest funding round include the venture arms of Cisco, Intel, AMD, and ServiceNow, as did DFJ Growth, WCM, investor Elad Gil, NVIDIA, Coatue, Y Combinator, Index Ventures, Founders Fund, Tiger Global Management, Thrive Capital, Spark Capital, Greenoaks, Wellington Management, and former GitHub CEO, Nat Friedman.

San Francisco-based Scale AI supplies a data foundry that helps drive advancements in AI. The company now provides data to power leading AI models from organizations like OpenAI, Meta, Microsoft, and more.

Scale AI’s Forge Price™ of $14.72 as of November 12, 2024, gives it a $13.97 billion valuation, a 1.2% premium to its last funding round in May 2024.

xAI, creator of the Grok chatbot

xAI, the artificial intelligence company led by Elon Musk, announced in May a $6 billion Series B funding round, with investors including Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed Bin Talal, and Kingdom Holding.

The San Francisco-based company is now in talks for another funding round that would raise several billion dollars and value it at around $40 billion, The Wall Street Journal reported in October.

Musk founded xAI in 2023 to “accelerate human discovery” via advanced AI systems. xAI’s Grok is an AI chatbot designed to answer questions based on real-time knowledge of the world via the X social media platform.

xAI’s Forge Price™ of $11.97 as of November 12, 2024, gives it a valuation of $24 billion, unchanged from its last funding round in May.