When launching an AI startup, there’s one undeniable hotspot: the San Francisco Bay Area. Known globally as a powerhouse for innovation and tech talent, the Bay Area has secured a staggering 73% of all AI-related venture funding in North America since last year, according to recent data. With heavy hitters like Nvidia, OpenAI, and Google already established there, the region is undeniably the epicenter for AI advancement.
New York Holds Firm in Second Place for AI Investments
Trailing significantly behind but still formidable, New York has solidified itself as North America’s second-largest AI investment hub. AI-focused startups in the Big Apple have attracted nearly $5.8 billion in funding over the past year. Notable investments include AlphaSense, securing a massive $650 million Series F, Insider raising $500 million in a Series E round, and Formation Bio pulling in $372 million to advance drug development technology.
When including Northern New Jersey, a region within commuting distance, the investment total grows even further. Jersey-based startups, led by AI cloud services provider CoreWeave, secured over $1.2 billion, with CoreWeave alone taking more than 90% of this figure.
Southern California and Toronto Compete Strongly
Southern California emerges as another significant player in AI investments, raising nearly $4.8 billion since last year. Leading this charge was Costa Mesa-based Anduril Industries, a defense technology unicorn that secured a monumental $1.5 billion Series F. Other notable startups include Flyr, an air-travel analytics provider with $225 million raised, and Zest AI, which secured $200 million to enhance lending technologies.
Farther north, Toronto has positioned itself as Canada’s AI hub, garnering just over $2 billion in venture investments. Leading this funding wave was Tenstorrent, an AI computing company receiving a substantial $693 million Series D, followed by Cohere, an AI data security firm, securing $500 million.
Austin, Boston, and Denver round out the list of cities surpassing $1 billion in AI investments. Austin’s top deal featured Saronic, a defense-focused autonomous shipping startup that raised $600 million. In Boston, generative AI firm Liquid AI attracted attention with a sizable $250 million Series A. Denver made its mark with Crusoe Energy Systems, which pulled in an impressive $600 million Series D to develop AI-powered data centers.
Can Secondary AI Hubs Gain More Ground?
Looking forward, it’s plausible that AI funding might spread more evenly, reflecting broader venture funding patterns. Though the Bay Area currently dominates generative AI funding, cities focusing on industry-specific AI applications could gain traction. As AI becomes mainstream across industries, the exclusive status of being an “AI startup” might gradually fade.
Nevertheless, for now, the Bay Area firmly retains its crown as North America’s preeminent hub for AI startup funding.
