AI startups buck funding winter, grow share in ’23

Chennai: Even as the funding winter looms over the startup ecosystem, AI startups seem to be bucking the trend as ChatGPT and Generative AI captivates India Inc. Deep tech, specifically AI, has emerged as the darling of venture capitalists (VC) in early stage funding.

The share of VC investments in AI startups stands at 15% of the total VC funding in the first five months of 2023 (January-May) compared to a corresponding 10% share commanded by AI startups in 2022, data sourced from research firm Venture Intelligence shows.

Overall VC investments have slumped on the back of a difficult economic environment in 2023, and accordingly, AI investments stood at just 28 deals worth $0.5 billion in 2023 (January-May) compared to 114 deals worth $2.4 billion in 2022.