US AI Startups Set Record with USD97 Billion in Funding in 2024 - In 2024, AI startups in the United States achieved a remarkable milestone, securing a record-breaking $97 billion in venture capital funding. This massive investment accounted for nearly half of the total $209 billion raised by all US startups during the year, according to data from PitchBook.

The surge in funding was driven by significant rounds of investment in major AI companies, including xAI, OpenAI, and Anthropic. These companies have been at the forefront of AI innovation, attracting substantial financial backing as the demand for artificial intelligence technologies continues to rise.

Overall, startup funding in the US saw a 33% increase in 2024 compared to the previous year, reflecting growing confidence in emerging technologies like AI. However, the year was also marked by a decline in the number of venture capital funds. Venture capital firms raised $76.1 billion across 508 funds, the lowest number of funds since 2014 and the smallest amount since 2019.

OpenAI, one of the biggest players in the AI industry, has faced both challenges and successes. As of January 2025, OpenAI has forecasted a $5 billion loss, with its $200 ChatGPT Pro subscription model falling short of expectations. The company is considering raising funds and increasing subscription prices to address these challenges. Furthermore, OpenAI is undergoing a significant transformation, with plans to transition to a public benefit corporation. This shift comes as OpenAI faces pressures for funding and increasing scrutiny over its operations.

In December 2024, OpenAI unveiled several new advancements, including the o3 AI model designed for advanced reasoning, which scored highly on the ARC-AGI benchmark. However, this innovation comes with high operational costs, with the top version of o3 costing over $10,000 per task. In addition, OpenAI introduced a free AI search feature for all ChatGPT users, improving the mobile experience with traditional search results.

Despite these challenges, OpenAI's commitment to AI innovation remains strong, with continuous updates to its offerings, such as the "Projects" feature aimed at helping users organize tasks more efficiently.