Sector Snapshot Key Trends in Dealmaking Artificial Intelligence

Sector Snapshot: Key Trends in Dealmaking 2 | Artificial Intelligence AI &machine learning (ML) have exploded inmarkets, public consciousness, and usage in the past 12 to 18months. NVIDIA, a key producer of the specialized chips that power multiple AI applications, saw its full-year 2023 revenue increase 126% year over year, 1 while OpenAI’s ChatGPT hit 100million weekly users in November 2023. 2 In public markets, AI has fueled all-time highs inmultiple indexes and stocks; in private markets and primarily in venture, even as economic andmarket volatility continue 1 “NVIDIA Announces Financial Results for Fourth Quarter and Fiscal 2024,” NVIDIA, February 21, 2024. 2 “ChatGPT Continues to Be One of the Fastest-Growing Services Ever,” The Verge, Jon Porter, November 6, 2023. Introduction to exact a toll on dealmaking levels and confidence, AI has seen significant resilience. Venture financing counts have fallen froma remarkable peak of 8,712 in 2021, yet aggregate VC investment has stayed strong even through the first tumultuousmonths of 2024. Skewed bymega- rounds such as Amazon’s investment in Anthropic andMicrosoft’s agreement withOpenAI, such resilience still speaks to the stage of the AI adoption cycle, as does the cumulative valuation of all private AI unicorns, which is at a record $1.12 trillion. *As of 02/20/2024. Source: PitchBook. Even as the venture market moderates, aggregate unicorn valuations hit a peak Aggregate AI &ML unicorn count and post-money valuation ($B) 2018 2015 2013 2020 2023 2014 2012 2011 2019 2016 2021 2024* 2017 2022 $1,200 $1,000 $800 $600 $400 $200 $0 300 250 200 150 100 50 0 Aggregate Value ($B) Active Unicorns NewUnicorns *As of 02/20/2024. Source: PitchBook. Deal value ($B) Deal count 2018 2015 2020 2023 2014 2019 2016 2021 2024* 2017 2022 734 $54.2 $13.9 $62.8 $81.4 $12.4 $51 $24.1 $124.3 $14.3 $28 $83.6 5,548 2,379 7,033 1,571 6,017 3,209 8,712 4,379 8,264 6,504 AI deal value remains resilient even amid downturn AI &ML VC deal activity $140 $120 $100 $80 $60 $40 $20 $0 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0