Introduction

Whether you live and breathe technology or you don’t know an algorithm from cookies, it’s safe to say that AI, or artificial intelligence, is now a household name.

From the AI search results on Google to the chatbots we interact with when reaching out to customer service reps, humans are interacting with AI more and more each day.

So, it’s not surprising that with the rise of AI popularity in day-to-day life, AI-focused companies are rising at rapid rates.

According to Crunchbase, $100B of venture capital funds went to AI startups in 2024, representing an 80% increase from 2023. According to the new Hypergrowth Startup Index report from HubSpot for Startups, data indicate that 34 of the 100 fastest-growing companies are AI-driven, and AI and machine-learning companies comprise 55% of the IT sector.

Founders with a dream of building a successful company, maybe even a unicorn, can find promising opportunities by pursuing AI … just look at how AI is reaching unprecedented growth, even when compared to the former startup industry darling, SaaS (Software as a Service).

The rise of AI startups

Following the pandemic, it seems the world is quickly transitioning to AI-centered technology. Search engines are using AI to summarize results and provide faster, more direct responses to users. Companies are adding AI tools to respond to customers quickly, 24/7. Marketing teams are brainstorming and repurposing content to extend their reach without expanding their budgets.

So, how many AI companies are there now, anyway? Exploding Topics reported that there are over 70,000 AI-centric companies now globally, with about 25% of these companies based in the U.S. Even more impressive? There are already over 200 AI unicorns globally.

According to Statista, AI growth is rapidly outpacing that of non-AI startups, with AI companies earning 60% higher valuations at the Series B funding stage compared to other types of startups, including SaaS companies. While AI startups raised $100B in VC funding in 2024, Crunchbase reported a decline in funding for SaaS startups for the same year. By May 2024, SaaS companies had raised only $4.7B.

Several factors can contribute to this growth. For one, demand for AI is high. Businesses can incorporate AI tools to enhance productivity and provide more comprehensive services to customers, even with limited resources. However, even consumers are leveraging AI to enhance their lives, from automating household tasks to budgeting to meal planning.

With the skyrocketing growth of AI, you can probably name a few successful AI startups off the top of your head, and you may even use some of their AI tools and services on a regular basis.

Here are some of the biggest names in the AI space today, with more information on their funding via Forbes.

OpenAI

Raising a staggering $63.92B and earning a valuation of $300B, OpenAI is one of the largest and most influential companies in the startup space, particularly with the launch and public adoption of ChatGPT. Both OpenAI and ChatGPT have become household names, and ChatGPT is widely used by consumers and businesses alike.

Anthropic

With over $17B in funding since its founding in 2020, Anthropic is one of the largest names in AI and one of the most valuable unicorns among all startups, boasting a valuation of $60B. Anthropic’s large language model (LLM), Claude, has quickly risen to become one of the most popular AI tools, capable of handling both quick, simple tasks and complex jobs, such as analysis and coding.

Databricks

Founded in 2013, Databricks isn’t quite as young as some of the other startups in this list. But it has been instrumental in AI innovation. Databricks has raised over $19B and is one of the top unicorns globally, with a post-valuation of $63B. The Databricks platform combines the convenience and efficiency of the cloud and AI to unify, manage, and process data.

Mistral AI

Mistral AI, an open-source AI platform, was founded in 2023 and has already received $1.1B in investments, with a valuation of over $6.2B. It is quickly becoming a major player in the AI space and a competitor to the likes of Claude and ChatGPT. Its configurable AI model is particularly useful for large companies.

Largest AI startup funding deals in 2024

For founders hoping to grow their own AI-related startups, looking to the VC market can help inspire their paths. The largest investments in AI last year spanned a range of different businesses, including chatbots, defense technology, data management, and even self-driving vehicles, from various investors.

According to NFX Capital and PitchBook, some of the major VC firms investing in AI today include:

• Andreessen Horowitz
• Sequoia
• NFX
• Bain Capital Ventures
• C2 Investment
• General Catalyst
• Lightspeed
• Tiger Global
• Khosla Ventures

So, which startups are raising the most money in the AI space? There are several AI startups making waves, with some founded within the last couple of years and others being among the biggest innovators in AI that have been around since the early 2010s.

These are the biggest fundraising deals in AI for 2024:

1. Databricks

Last year, AI giant Databricks raised over $10B in a late-stage venture round, the largest VC deal of 2024. The company has planned to allocate the funding to expansion, product development, acquisitions, and increased liquidity for current and former employees. As CNBC reported, if Databricks were to pursue an IPO, that could happen as early as the middle of this year.

2. OpenAI

With its $6.6B investment in 2024, OpenAI takes second place for the largest investment deal of last year. According to the company, it will use the funds to further AI research, increase the computing capacity of its AI, and build more AI tools. However, as Crunchbase reported, the funding arrived at a complicated time for the company; as such, the funding deals were arranged to remove return caps for investors and to allow investors to request their money back if the company’s restructuring isn’t complete within two years.

3. xAI

xAI, a company founded by the controversial figure Elon Musk, raised two separate rounds of $6B each last year, once in May and again in November. Following the November round, the company is now valued at $50B. xAI’s primary product is the AI tool Grok, which is trained on content from X (formerly known as Twitter). xAI acquired X, also owned by Musk, in March 2025, as Axios reported.

4. Waymo

The autonomous driving company Waymo, formerly known as the Google Self-Driving Car Project, raised $5.6B last year and has now reached a valuation of $45B. Google’s parent company, Alphabet, made the investment in Waymo, which has been quickly expanding its robotaxi services. As Bloomberg reported, Waymo’s robotaxi services are now making up 20% of Uber rides in Austin, Texas.

5. Anthropic

Last year, Anthropic raised $4B from an investment by Amazon, putting its valuation at $60B. With the latest investment, Anthropic has now designated Amazon Web Services as its primary cloud and training partner and will also utilize AWS hardware to help build its AI models.

Additional companies that raised over $1B in 2024 include Veeam Software, G42, Anduril Industries, CoreWeave, Wayve, Moonshot AI, Safe Superintelligence, Scale AI, and Xaira Therapeutics.

Why AI startups are scaling faster than SaaS startups

With some of the biggest startup investments in 2024 going to AI companies, and with more and more AI startups joining the exclusive club of unicorns, founders may wonder why these startups are growing so rapidly compared to SaaS, which has long been one of the most popular types of startups.

It comes down to novelty. Although artificial intelligence has technically been around for decades, it has only recently gained widespread recognition in the public sphere. It also comes down to efficiency. AI is both new and broadly helpful, which has helped drive demand from consumers and, in turn, investors.

Some reasons that AI startups are scaling quickly compared to SaaS startups include:

• Investor interest: AI is an innovative new technology, and that’s grabbing attention from investors. With innovation comes opportunities, and investors are open to the chance of funding the next big unicorn in the AI space.
• Integration: AI is versatile and can integrate into a wide range of enterprise and consumer products. That can help drive demand as businesses and customers seek out AI to help with everyday tasks and operations.
• Money savings: With AI, companies and customers can be more productive with fewer resources. That, too, is driving demand for automation, whether that’s to answer emails or write grocery lists. For startups, using and selling AI means the company can scale faster with fewer team members while also capitalizing on the increasing demand for AI products.
• Media hype: Because AI is so new and innovative, it’s grabbing a lot of attention. Frequent headlines on what AI can do — from creating content to meal planning to analyzing medical records to predicting and tracking deforestation — further drive interest in the technology and boost demand.

So, what does all this mean for startups? For startups seeking VC investments, understanding what investors are looking for and how to stand out among competitors will be key to securing funds, especially as firms look to consolidate into fewer, but larger, deals.

It also means that startups can consider alternative ways to fund their operations, such as through strategic partnerships. According to the HubSpot 2025 Hypergrowth Startup Index, this method is gaining traction, with partnerships reaching an average deal value of $9.9B.

For early-stage startups, the rapid growth of AI can also help direct you to product development. Maybe you haven’t nailed down your prototype — in that case, it may be time to consider whether incorporating AI could provide more value to your target audience.

Conclusion

With a demand to do more with less, businesses and consumers are turning to AI. As such, startups with a focus on AI are quickly outpacing other types of startups in terms of scaling.

While AI is clearly winning over consumers and investors alike, this new technology isn’t necessarily going to replace SaaS. Instead, SaaS startups will want to consider how they can utilize AI tools, either as products to sell or as tools to enhance productivity and efficiency, in order to better compete in an AI-dominated market.

And ultimately, building a successful startup isn’t about how fast you reach that high valuation. Whether you’re an AI startup, a SaaS company, or a business selling physical products, the goal should be to pursue growth at a sustainable level.

Slow, sustainable growth will take startups much further, as revealed in the 2025 Hypergrowth Startup Index. Learn more about the biggest startups today and how they are scaling with long-term success in mind in this latest report.

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