After years of sluggish exits and a frozen IPO pipeline, venture capitalists finally have something to smile about — AI dealmaking is gaining momentum. While public listings remain scarce, the acquisition spree sweeping across the AI sector hints that 2024 might mark a turning point.
Already, the first quarter is off to a roaring start. According to Crunchbase data, a total of 65 venture-backed AI startups have been snapped up. That’s not just an improvement over the same period last year — it’s also outpacing the deal count from both Q4 2023 and Q1 2023. At this pace, the number of acquisitions could easily match the 76 deals averaged in the more active quarters of 2023.
But, as anyone in venture capital knows, it’s not just the number of deals that counts — it’s the money behind them.
Billion-Dollar Bets Signal Growing Confidence in AI Startups
Last week, the industry saw its largest AI acquisition in more than a year. ServiceNow made headlines after announcing its plan to acquire Moveworks, an enterprise AI assistant platform, in a $2.85 billion cash-and-stock deal. It was a staggering figure — and a clear sign of how much value is now being placed on AI-powered enterprise tools.
Yet, the Moveworks deal was just the tip of the iceberg. Only days earlier, CoreWeave, a rising star backed by Nvidia, secured its own headline-making acquisition. The cloud computing powerhouse acquired AI development platform Weights & Biases for a jaw-dropping $1.7 billion, marking the third-largest AI-related deal so far this year.
Adding to the momentum, Metaphysic, known for creating hyper-realistic AI-generated content for the entertainment industry, made a splashy move last month. The company acquired AI content tech firm Brahma in a $1.4 billion deal, securing its spot among the biggest transactions since early 2023.
Meanwhile, robotic process automation giant UiPath also made waves by acquiring agentic AI startup Peak.ai. While financial details weren’t disclosed, the acquisition still generated plenty of buzz across the industry.
$7.4 Billion in AI Deals — and Counting
So far, the disclosed value of AI acquisitions this year is nothing short of staggering. In total, these deals have moved nearly $7.4 billion — a massive leap from just $377 million in Q1 2024. That’s a 1,750% surge in deal value. Even when compared to the $1.5 billion in Q4 last year, it’s a jump of nearly 400%.
For context, even the more robust Q3 of 2023 only saw around $4 billion in disclosed AI deals. Clearly, 2024 is shaping up to be a breakout year for venture investors seeking liquidity in a sector often criticized for being cash-intensive with few exits.
Will AI Dealmaking Keep the Momentum?
Of course, not everyone is ready to declare a full-scale M&A boom just yet. One tech M&A banker, reflecting on the recent flurry of deals, cautioned that broader market uncertainty is still keeping many buyers on the sidelines. His take? Expect “incremental growth” rather than a flood of deals.
AI adds another layer of complexity to the mix. With the sector evolving so rapidly, buyers face a tough challenge: which companies — and which AI technologies — are truly worth betting on long term?
Still, if recent billion-dollar acquisitions are any indication, some players aren’t waiting around. They’re diving in — and betting big.
Whether this marks the beginning of a sustained AI dealmaking boom or just a momentary surge remains to be seen. But one thing is clear — AI startups are no longer just raising money; they’re cashing out in a very big way.
