While not everyone is convinced of the return on investment in generative AI, it’s still an exciting field to watch! But it’s great to see that many investors are feeling the same way, as the latest figures from funding tracker PitchBook show.

In Q3 2024, VCs invested a whopping $3.9 billion in generative AI startups across 206 deals, according to the lovely folks over at PitchBook. (This doesn’t include OpenAI’s $6.6 billion round.) And the great news is that $2.9 billion of that funding went to US-based companies across 127 deals!

We’re delighted to announce that some of the biggest winners in Q3 were coding assistant Magic, enterprise search provider Glean and business analytics company Hebbia. Magic received an impressive $320 million in August, while Glean and Hebbia both enjoyed successful funding rounds in September and July, with $260 million and $130 million respectively. China’s Moonshot AI did really well, raising $300 million in August! And Sakana AI, a Japanese startup focused on scientific discovery, closed a $214 million tranche last month.

Generative AI is a broad cross-section of technologies that includes text and image generators, coding assistants, cybersecurity automation tools and more. As with anything new, it has its critics. Some experts have raised questions about the reliability of the technology and, in the case of generative AI models trained on copyrighted data without permission, its legality.

But VCs are basically betting that generative AI will become a big deal in some of the most profitable industries out there. They think it’ll keep growing even though there are a few hurdles along the way.

Well, who knows? Maybe they’re right! A Forrester report suggests that 60% of people who are still a bit unsure about generative AI will actually use it at some point, whether they realise it or not. It could be for things like summarising information or even creative problem-solving.

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