No Place Rivals The Bay Area For AI Funding, But Here Are The Closest Runners-Up
If you want to start an AI company in the hottest hub for talent and innovation, you’ll inevitably wind up in the San Francisco Bay Area.
When it comes to startup investment, nowhere else comes close. Since last year, Bay Area companies have locked up 73% of all AI-related venture funding for North America, per Crunchbase data. Plus, of course, so many of the most influential players in the space — including Nvidia, OpenAI and Google — are already there.
But while Northern California may be in first place by a long shot, there are multiple other metros vying for runner-up status.
By our analysis, at least seven other North American metropolitan areas have pulled in more than $1 billion in AI-focused startup investment since last year. Several more are in the hundreds of millions.
To get a sense of the rankings, we used Crunchbase data to chart 20 of the top metro areas for AI-related startup funding, spanning from San Francisco to Raleigh, North Carolina.
New York, a solid though distant second
New York, the second-largest hub for startup funding overall, is also No. 2 for AI-specific investment.
Since last year, Big Apple companies have pulled in nearly $5.8 billion in AI-related startup funding. The largest round was a $650 million Series F for AlphaSense, an AI-enabled market intelligence tool, followed by a $500 million Series E for marketing platform Insider, and a $372 million Series D for drug development startup Formation Bio.
The numbers are a bit higher if one folds in Northern New Jersey, which we counted separately but is also within commuting distance. Jersey companies have raised more than $1.2 billion for AI, with over 90% of the total going to AI cloud services provider CoreWeave, Crunchbase data shows.
Next up: Southern California and Toronto
Southern California is also no slouch for AI-related funding. The region captured nearly $4.8 billion in startup funding since the beginning of last year for sectors from defense tech to loan processing.
Costa Mesa, California-based defense unicorn Anduril Industries landed the biggest investment: a $1.5 billion Series F in August. Other large funding recipients include Flyr, a provider of predictive analytics for the air travel industry that raised $225 million, and Zest AI, an AI tool for lenders that picked up $200 million.
Over 2,000 miles away, in much colder environs, Toronto is also carving out a niche as Canada’s center for AI entrepreneurship.
Since last year, just over $2 billion in venture funding has gone to startups around Canada’s largest city, Crunchbase data shows. Tenstorrent, a developer of computers optimized for AI workloads, picked up the largest round with a $693 million December Series D. Next was data security-focused AI company Cohere, with a $500 million July Series D.
Austin, Boston and Denver round out the $1B+ club
Austin, Boston and Denver also ranked among locales that pulled in more than $1 billion in AI-related startup funding since the start of 2024.
The biggest deal in Austin, Texas, was a $600 million Series C for Saronic, which builds unmanned ships for the defense industry. For Boston, it was Liquid AI, a generative AI startup that closed on a $250 million December Series A.
In Denver, meanwhile, the largest round by a long shot was a $600 million October Series D for Crusoe Energy Systems, a developer of AI-optimized data centers.
Will secondary AI hubs nab a bigger share of funding?
Looking ahead, it wouldn’t be surprising to see the geographic breakdown for AI-related funding more closely resemble the venture landscape overall in a few years.
While the most heavily funded generative AI players are in the San Francisco area, the region’s dominance is less pronounced for startups working on industry-specific AI applications. It’s also possible the distinction of being an AI startup will fade over time, as virtually every company adopts the technology.
For now, however, the Bay Area remains leagues ahead in the AI funding race.
Related reading:
- The SF Bay Area Has Become The Undisputed Leader In AI Tech And Funding Dollars
- North American Startup Funding Spikes To Close 2024
- Eye On AI: Who Were The Most-Active AI Investors In 2024?
- Startup Funding Regained Its Footing In 2024 As AI Became The Star Of The Show
Illustration: Dom Guzman
