AI Companies in EU and Israel Witness Resurgence in Investment Post Drought

Funding for artificial intelligence (AI) and cloud companies in the U.S., Europe, and Israel is experiencing a resurgence after three years of decline and is expected to reach $79.2 billion by the end of 2024. This marks a significant 27% increase from 2023’s figure of $62.5 billion, with generative AI companies contributing to nearly 40% of the total investment.

According to venture capital firm Accel, AI is driving a major technological shift, surpassing previous trends such as broadband, mobile, and cloud. Notably, of the $56 billion invested in generative AI across 2023 and 2024, approximately 80% has gone to U.S. companies, with the remaining 20% directed toward firms in Europe and Israel.

Key players in the U.S. include OpenAI, which raised $6.6 billion in October 2024, Elon Musk’s xAI ($6 billion in May), and Anthropic, which secured $4 billion from Amazon. In Europe, companies like Mistral, Aleph Alpha, and DeepL have attracted the largest funding.

In 2024, $25 billion was invested in private GenAI companies in the U.S., compared to $6.4 billion in Europe. Although Europe’s funding is smaller, it’s growing at a faster rate, jumping from $2.4 billion in 2023 to $6.4 billion, while the U.S. saw $22.4 billion in 2023.

Despite the AI boom, Accel noted that outside of AI, the software market is shifting towards a focus on profitability rather than high growth, signaling a more cautious investment environment in other tech sectors.