The Biggest Of The Big: AI Startups Raised Huge — These Were The Largest Deals Of 2023

Artificial intelligence was big in 2023 — and that could be the understatement of the year.

For a time — especially in the middle of the year — it seemed like nine-figure rounds were being thrown out by investors every week to the latest and greatest AI startup. Sometimes, there were so many huge rounds it was hard to keep track.

However, that’s why we’re here. Per Crunchbase data, there were eight deals of at least a half-billion dollars or more consummated this year involving AI startups. Let’s take a look at the biggest deals and who invested.

1. OpenAI, $10B: Obviously, we have to start with this one — which was a harbinger of things to come in 2023. Officially, Microsoft simply said it had agreed to a “multiyear, multibillion-dollar investment” into OpenAI, but several reports tabbed it as a $10 billion deal. That followed an earlier $1 billion Microsoft investment in the AI startup. The deal also marked Microsoft — and OpenAI — as dominant players in the AI space, with other tech giants such as Alphabet and Amazon needing to play catchup.

2. Anthropic, $4B: San Francisco-based Anthropic raised nearly $7 billion in funding this year alone — so it was busy. However, this September round was the largest. The ChatGPT rival inked a deal with Amazon for the e-commerce and cloud titan to invest up to $4 billion in the AI startup. The new investment gives Seattle-based Amazon a minority stake in Anthropic. The immediate investment is $1.25 billion, with either party having the right to trigger another $2.75 billion in funding, Reuters reported. As part of the deal, Anthropic will now use Amazon Web Services data centers, as well as AWS Trainium and Inferentia chips to build, train and deploy its models. No valuation was given with the round.

3. Anthropic, $2B: Like we said earlier, Anthropic was busy this year. This was the company’s second-biggest deal of the year. According to a WSJ report, previous investor Google agreed to invest up to $2 billion in the OpenAI competitor. The deal includes $500 million upfront and an additional $1.5 billion more over time, per the report. In February, it also was reported that Google had invested between $300 million and $400 million in the startup.

4. Inflection AI, $1.3B: In June, Palo Alto, California-based Inflection AI locked up a huge $1.3 billion round led by Microsoft, Reid Hoffman, Bill Gates, Eric Schmidt and new investor Nvidia, which valued Inflection AI at $4 billion, according to Forbes. The startup is building what it says will be the “largest AI cluster in the world” and has created large language models to allow people to interact with its AI-powered assistant called Pi, or Personal AI. Pi lets people quickly receive relevant information and advice on their interests. Founded in 2021, the generative AI platform is a competitor to other AI firms such as OpenAI and Google. It was co-founded by Mustafa Suleyman, who previously co-founded the Google-owned AI lab DeepMind and serves as CEO at Inflection.

5. Metropolis, $1.1B: Isn’t this a parking startup? Well yes, but it uses computer vision and AI in its offering so we’re including it. The Los Angeles-based checkout-free parking startup raised $1.7 billion in debt and equity led by Eldridge and 3L Capital. The company raised $1.05 billion through a Series C offering and $650 million of debt financing. The money was used to take logistics firm SP Plus private in a deal worth approximately $1.5 billion — the biggest M&A transaction of the year by a VC-backed company, per Crunchbase data. It even beat out Databricks’ purchase of San Francisco-based language models training startup MosaicML for $1.3 billion in June.

6. Databricks, $685M: Also not a pure-play generative AI firm, Datbricks makes the list. The AI-enhanced data analytics company raised more than a big Series I led by funds and accounts advised by T. Rowe Price Associates. The deal — approximately $685 million, per a filing — values the company at $43 billion, a boost from the $38 billion valuation San Francisco-based Databricks received after raising a $1.6 billion Series H led by Morgan Stanley’s Counterpoint Global in 2021. The new round also included chip-making giant Nvidia — which has been busy of late investing in AI startups. During its second quarter, the company said it passed the $1.5 billion revenue run rate at more than 50% revenue year-to-year growth.

7. (tied) Aleph Alpha, $500M: Germany-based Aleph Alpha raised a $500 million Series B as AI startups outside the U.S. continued to see bigger rounds as the year wore on. The round was led by Innovation Park Artificial Intelligence, Bosch Ventures and the companies of Schwarz Group. Founded in 2019, Aleph Alpha allows companies to develop and deploy large language and multimodal models. Its presence in Europe may help set it apart from other U.S.-based startups like OpenAI and Anthropic as more regulations are put into place around the world. Aleph Alpha did not announce a valuation with the new round.

7. (tied) SandboxAQ, $500M: Nearly a year after spinning off from tech giant Alphabet, AI and quantum computing startup SandboxAQ announced details of the funding in February, saying it had raised a $500 million round. SandboxAQ is examining the related effects of both AI and quantum — which is where the company gets “AQ” — to develop commercial products for telecom, financial services, health care, security and other computationally intensive sectors. One aspect of security the startup is looking at is how companies and the government can replace current public-key cryptography algorithms with algorithms that are resistant to quantum computer-based attacks. Investors named include Breyer Capital, former Google CEO Eric Schmidt, Thomas Tull, First Light Capital Group, funds and accounts advised by T. Rowe Price Associates, Guggenheim Investments, Time Ventures, Section 32, Parkway Venture Capital and others.

9. Anthropic, $450M: Yep, one last time. Anthropic raised $450 million in Series C funding led by Spark Capital back in May. Like we said — it’s been very busy.

10. Mistral AI, $415M: Paris-based Mistral AI, another OpenAI and Anthropic competitor, raised a massive round of approximately $415 million near the end of the year at a $2 billion valuation, according to a Bloomberg report. Per the new report, the round included an equity from investors led by Andreessen Horowitz — which was expected to invest more than $200 million. Other investors in the round include General Catalyst, Lightspeed Venture Partners and Bpifrance. In addition, both Nvidia and Salesforce 1 agreed to contribute convertible debt to the deal. The raise comes just about six months after the startup — which is developing an open-source large language model — raised a seed round worth approximately $111 million led by Lightspeed Venture Partners.

Those 10 rounds alone add up to more than $16 billion — that’s a lot of venture dollars in just 10 rounds no matter how you look at it.

Astute readers may also have noticed something else peculiar about the rounds other than just their size — who invested?

Microsoft led the biggest and co-led the second-biggest rounds. Nvidia co-led the second-largest round. Amazon the third. Google invested in the Anthropic round above (and one just off the list), while Nvidia participated in the Databricks round.

Coporates dominated much of AI investing, especially Nvidia which has hit it big with its much in-demand chips — becoming a $1 trillion-plus company this year. Aside from the companies on the list, the chip giant also took part in several big AI rounds for other startups such as Together AI and Enfabrica. It even has invested in a handful of biotech companies using AI.

While we often call it venture funding, many venture firms had to get in line behind Big Tech as they made their bankrolls felt. We could be in for more of the same next year.