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AI Funding Soars to $17.9 Billion Amid Tech Slump

In Silicon Valley, multibillion-dollar investments in artificial intelligence businesses have practically become standard. Funding for AI startups reached $17.9 billion in the third quarter, surpassing funding totals for all other tech categories.

The value of funding for AI companies climbed 27% globally in the third quarter compared to the year before, despite an overall decline in startup deals. This trend highlights the divide between AI startups and the rest of the tech industry, which faces challenges due to rising interest rates and a post-pandemic slump.

Some venture capitalists compare the AI boom to the early days of the consumer internet, with generative AI technology, like OpenAI's ChatGPT, gaining traction and investment. However, this excitement has cast a shadow over other tech sectors, which have seen declines in comparison.

Even within the AI industry, total fundraising is not yet back to pre-pandemic levels, with success driven by a few standout companies. The hype surrounding AI has prompted a wait-and-see approach in other tech sectors, as the spotlight shifts to pure AI companies.