Top 10 AI Companies That Secured Funding in 2023
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In 2023, the development of the artificial intelligence (AI) industry reached new heights, which might be an understatement for the year. Particularly in the middle of the year, investors seemed to pour hundreds of millions of dollars into the latest and most outstanding AI startups every week. At times, there were so many massive funding rounds that it became difficult to keep track. According to Crunchbase data, there were at least eight large deals exceeding $500 million involving AI startups this year. Let's take a look at some of the biggest deals and their investors.
OpenAI, $10 Billion: Clearly, we must start with this deal—a harbinger of what's to come in 2023. Microsoft officially announced that it has agreed to a "multi-year, multi-billion dollar investment" in OpenAI, though multiple reports peg the deal at $10 billion. This follows Microsoft's previous $1 billion investment in the AI startup. The deal also solidifies Microsoft and OpenAI as leaders in the AI field, with other tech giants like Alphabet and Amazon needing to catch up.
Anthropic, $4 billion: San Francisco's Anthropic raised nearly $7 billion in funding this year alone. However, the September funding round was the largest. This ChatGPT competitor struck a deal with Amazon, where the e-commerce and cloud giant would invest up to $4 billion in the AI startup. The new investment grants Seattle-based Amazon a minority stake in Anthropic.
Anthropic, $2 Billion: As mentioned earlier, Anthropic has been quite busy this year. This marks the company's second-largest deal of the year. According to The Wall Street Journal, existing investor Google agreed to invest up to $2 billion in OpenAI's competitor. The deal reportedly includes an initial $500 million payment followed by an additional $1.5 billion.
Inflection AI, $1.3 billion: Located in Palo Alto, California, Inflection AI secured a massive $1.3 billion funding round in June, co-led by Microsoft, Reid Hoffman, Bill Gates, Eric Schmidt, and new investor NVIDIA.
Metropolis, $1.1 billion: This is a parking startup utilizing computer vision and AI. The Los Angeles-based checkout-free parking startup raised $1.7 billion through a combination of debt and equity financing led by Eldridge and 3L Capital.
Databricks, $685 million: Not purely a generative AI company, Databricks made the list. This AI-enhanced data analytics firm raised a substantial amount in a large Series I funding round led by funds and account advisors from T. Rowe Price Associates.
(Tied) Aleph Alpha, $500 million: Germany's Aleph Alpha raised $500 million in a Series B funding round.
(Parallel) SandboxAQ, $500 million: Nearly a year after spinning off from tech giant Alphabet, AI and quantum computing startup SandboxAQ disclosed its funding details, announcing it has raised $500 million.
Mistral AI, $487 million: Paris-based Mistral AI secured a substantial funding round of nearly $487 million by the end of the year.
Anthropic, $450 million: Yes, Anthropic once again. The company raised $450 million in Series C funding in May.
These 10 funding rounds total over $16 billion, which is a substantial amount of venture capital by any measure. Notably, beyond the scale of the funding rounds, who are the investors?
Microsoft led the largest funding round and also participated in the second largest one. Nvidia co-led the second largest round. Amazon invested in the third largest round. Google invested in a round for Anthropic (as well as another round on the list), while Nvidia participated in a round for Databricks.
Large enterprises dominate many AI investments, particularly NVIDIA, whose high-demand chips have made it a company with an annual market capitalization exceeding $1 trillion. Beyond the companies on the list, the chip giant has also participated in several major AI funding rounds for other startups, such as Together AI and Enfabrica. It has even invested in several biotech companies utilizing AI.
Although we often call it venture capital, many venture capital firms have to line up behind big tech companies because they excel at demonstrating their financial strength. We may see more of this next year.