PitchBook: Artificial Intelligence and Machine Learning Report, Q2 2024

On June 11, Mistral AI received US$640 million in Series B financing, with a post-financing valuation of US$6.5 billion.

On June 14, medical software company Tempus AI went public on the Nasdaq with a post-financing valuation of $6.1 billion, based on an enterprise value (EV)/historical revenue of 10.9 times.

On June 15, basic model challenger xAI received US$6 billion in Series B financing with a valuation of US$24 billion.

Venture Capital Activities

Venture capital activity surged in the second quarter of 2024, driving 30 $1 billion rounds. PitchBook tracked $30.8 billion in VC funding to AI and machine learning companies in the second quarter, including $6 billion in xAI. Nvidia participated in four of the top five deals of the quarter: CoreWeave’s $1.1 billion round, Mistral AI’s Series B round, Scale AI’s Series F round with Amazon and Meta, and Wayve’s $1 billion round with Microsoft. Despite corporate venture capital, deal volume remains significantly below pre-recession levels, consistent with the past seven quarters. For startups that are able to raise funding, valuations continue to rise, with the median pre-money valuation for early-stage and late-stage investment deals reaching new highs of $28.2 million and $50 million, respectively.

Exit activity rebounded in the second quarter after a decline in previous quarters, with both exit values ​​and country of origin rising. Exit value reached $11.5 billion, the highest level since the second quarter of 2022, supported by Tempus AI's listing at an EV/revenue multiple of 10.9x. This was the first of two major acquisitions, with the company also acquiring Deci, a platform for optimizing AI models for hardware efficiency. The transactions, with an estimated total of $1.3 billion, highlight the investments hardware vendors are willing to make to strengthen their software ecosystems. Rival AMD followed closely behind, acquiring Fireworks AI and Silo AI for a total of $717 million, indicating that M&A is concentrated among acquirers of the best-performing stocks. Other outlier acquisitions include Hyundai's acquisition of Motion for $923 million; and JFrog's acquisition of Qwak for $230 million.

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