In Episode 86 of Localogy’s This Week in Local podcast, my co-host Mike Boland and I examine the meaning behind recent data showing that AI-focused startups accounted for about a third of all venture capital raised worldwide in Q2 2024.

In this brief episode, we kicked around what this means. As Mike and I have discussed many times on the pod, not all AI startups are created equal.

There are those startups that are really just building a thin layer on top of ChatGPT to compete a very specific function. And then there are those doing AI “deep tech” that are the most likely to get funded. And when they do, the rounds tend to be large because of the high cost of AI.

Those in the latter category are likely helping to drive up average deal size.

This conversations reminded me of the interview I conducted on stage at L24 with Read AI founder David Shim.

David, who was fresh off raising a large Series A, said investors today are looking at all AI startups with a “high degree of skepticism.” Again, largely because so many startups calling themselves AI are just building on ChatGPT.

Another observation on this episode is that the term “AI startup” is a bit misleading. Most are actually fintech or robotics or martech or other kinds of companies that are using AI as a fundamental driver.

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