KPMG "DeepSeek Launch, VC Investment in AI Expected to Expand This Year"

Q4 2024 VC Investment Trends Announced
Investment Amount Up 33% Year-on-Year

Following the fourth quarter of last year, global venture capital (VC) investment in the artificial intelligence (AI) sector is predicted to increase significantly again this year.

KPMG '2024 Q4 VC Investment Trends' Report. Provided by Samjong KPMG

According to the ‘Q4 2024 VC Investment Trends’ report published by global accounting and consulting firm KPMG on the 6th, global VC investment in the fourth quarter of last year reached $108.6 billion (approximately 157 trillion KRW), marking the highest level in 10 quarters. This represents a 33% increase compared to the same period the previous year.

The United States led this growth. Among eight mega deals exceeding $1 billion, six were concentrated on AI-related companies including AI models, application solutions, and infrastructure, with five of these deals involving U.S.-based AI companies. These include Databricks ($1 billion), OpenAI ($6.6 billion), xAI ($6 billion), Waymo ($5.6 billion), and Anthropic ($4 billion).

In Europe, despite strengthened regulations such as the EU AI Act, AI-related investments continued. Investments were actively made not only in AI infrastructure but also in AI application models across various industries such as biotech and space tech, including the UK data center company Greenscale ($1.3 billion), Turkey’s AI marketing platform Insider ($500 million), Finland’s smart ring developer for sleep monitoring Oura ($200 million), and radar satellite imaging technology company Iceye ($160 million).

Jung Do-young, partner at Samjong KPMG Startup Support Center, stated, “AI is expected to remain the largest VC investment sector in the first quarter of this year, with investments expanding in AI solution companies applied across various industries such as biotech, robotics, cybersecurity, defense tech, and autonomous driving.” He added, “The launch of Chinese AI startup DeepSeek broke the existing perception that large-scale capital is necessary for AI model development, intensifying the AI development competition among domestic and international startups and increasing the likelihood of expanded investments by companies and VCs.”

In the Asia-Pacific region, investment in the fourth quarter of last year was $12.8 billion (1,977 deals), marking the lowest quarterly level on record. Notably, China’s VC investment sharply declined from $10.3 billion in Q3 to $5.8 billion in Q4. However, investments were made in alternative energy, autonomous driving, and data centers, including China Nuclear Energy Power Company ($1.1 billion) and Didi Chuxing’s subsidiary Didi Chuxing Autonomous Driving ($298 million).

India’s VC investment also contracted to $2.6 billion in Q4, but recovery is expected this year as fintech company Pine Labs and eyewear brand Lenskart, backed by SoftBank, have been pursuing IPOs over the past 18 months.

Despite global geopolitical conflicts, high interest rates, and uncertainties such as major elections, the global VC market recorded $368.3 billion last year, a 5% increase compared to the previous year. However, the number of investment deals in Q4 fell 31% year-on-year to 7,022, and the global VC exit market was limited to $318.4 billion and 2,719 deals due to a contraction in the IPO market.

KPMG forecasted, “Although uncertainties remain due to the inauguration of the second Trump administration, with election-related variables resolved and the trend of interest rate cuts continuing in major countries, the IPO market is expected to recover this year, leading to improvements in the global VC market.”

This content was produced with the assistance of AI translation services.