The fastest growing category of US venture investment in 2024 is AI. Venture capitalists have invested $18.3 billion through the first four months of the year.

At this pace, we should expect AI startups to raise about $55b in 2024.

AI startups now command more than 20% share of all US venture dollars across categories, including healthcare, biotech, & software.

In the preceding eight years, that number was about 8% per year. But after the launch of ChatGPT in 2022, there’s a marked inflection point.

Some of this is new company formation, & there has been a significant amount of seed investment in this category. Another major contributor is the repositioning of existing companies to include AI within their pitch.

Over time, this share should attenuate, primarily because every software company will have an AI component, & the marketing effect for both customers & venture capitalists, will diffuse.

Not surprisingly, investors have concentrated total dollars in a few names, with the top three companies accounting for 60% of the dollars raised. Power laws are ubiquitous in venture capital & AI is no exception.