Global artificial intelligence funding decreased during the first quarter of this year by about 66 percent to reach $5.4 billion, compared to $15.7 billion in the same period last year, which is the lowest quarterly financing since the first quarter of 2018.
As for deals, they declined during the same period for the fourth quarter in a row, which is the lowest number since the fourth quarter of 2017, to record 554 deals during the first quarter of 2023.
According to CB Insight data, the average deal funding for AI companies fell in the first quarter of 2023, reaching only $25 million, which is less than half of the average deal size in 2022, and far below even pre-pandemic levels.
As for the huge rounds estimated at $100 million, they recorded a decline in the first quarter of 2023, as there were only eight rounds in the first quarter of 2023, which is the lowest number since the first quarter of 2019.
At the regional level, total financing of US-based AI companies reached $3.7 billion in the first quarter, a quarter-on-quarter decrease of 27 percent, and the number of deals declined for the fourth consecutive quarter to 232 deals.
However, Silicon Valley has seen a rebound in the first quarter of 2023, with financing increasing by 41 per cent and deals increasing by 20 per cent.
This increase in funding was driven by huge rounds of $1.2 billion in total that went to a handful of AI companies based in the region. Meanwhile, financing for Asian-based companies collapsed to its lowest level since the fourth quarter of 2016, due to unusually weak investment activity in artificial intelligence in China. In Europe, financing for artificial intelligence fell, but remained above average. before the pandemic.
Europe hosts 38 percent of its AI firms headquartered, US-based firms accounted for 33 percent and Asia’s share was 17 percent.
As for acquisition and merger deals, the first quarter of this year recorded 75 merger and acquisition deals for artificial intelligence companies, an increase of 12 percent on a quarterly basis, but still less than their highest levels in 2021. As for public offerings, only two subscriptions were registered.
