January 30, 2025

Can't stop, won't stop

Hi there, 

We just launched our State of AI 2024 Report.

Download the 162-page report to access comprehensive data and charts on the evolving state of AI across exits, top investors, geographies, and more.

And now, here is this week’s Hot or Not.

Hot: AI dough

Global AI funding surged past the $100B mark for the first time ever in 2024. 

This was heavily driven by $1B+ deals to AI model and infrastructure players.

OpenAI, xAI, and Anthropic raised 4 out of the 5 largest rounds in 2024 as they burned through invested cash to fund the development of frontier models.

However, DeepSeek’s R1 model, reportedly developed at a fraction of the cost of its US rivals’ models, has raised questions about this level of capital investment for infrastructure development.

Discover what DeepSeek’s model releases mean for the future of AI here.

Not: Vertical AI tech

Vertical-specific AI companies are seeing less investor love. 

Fintech, digital health, and retail tech now account for just 24% of overall AI deals — that’s down from 38% just 5 years ago. 

See how AI investment strategies are evolving in our State of AI 2024 Report.

Note: I do think this is natural in the buildout phase of a new space and this trend will reverse. As to when? I’m not sure.

Hot: China in AI

China’s DeepSeek has put the spotlight on the country's AI development ecosystem. 

What other companies are drawing attention? 

See the “AI tigers”: Moonshot AI, Zhipu AI, Baichuan AI, MiniMax, and 01.​AI. 

All 5 have nabbed $1B+ valuations and backing from China’s big tech companies.

More details on the landscape here.

Not: Fintech launches

HSBC shut down its payments app Zing one year post-launch as part of a “simplification” plan. 

Zing was aimed at competing with fintechs like Revolut and Wise (both leaders in the CB Insights market ranking below) but didn’t expand outside of the UK. 

The initiative had grown out of HSBC’s 2022 investment in digital banking startup Monese.

Other banks, like NatWest and Barclays, have also shut down fintech product launches in recent years.

I remain unconvinced that established, incumbent corporations can do innovation like this on their own.

The antibodies to this type of innovation in big cos are too strong.

In the build, buy, partner decision, buying or partnering are more likely to be successful (in addition to being quicker and less risky).

If you want to see where your competitors are partnering or identify potential partners, we’ve built the world’s largest dataset on partnerships. 

The +1

Source: u/d2mensions via Reddit

Tall tales. Beyond this graph just being utterly stupid and useless, it’s a good reminder that nothing good ever happens when you start the y-axis at 5’0”. My lord — this graph is stupid.

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. Do you want to dig into the data behind our State of AI Report? Join our analysts on February 11 for a live briefing.

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