Financing Wrap: AI startups have done well thus far in 2024

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Due in part to a broader expectation that AI would revolutionize the computer industry, crypto venture capitalists (VCs) started the year with a plethora of investments in firms that somehow link cryptocurrency and AI.

Many of the projects that are closing rounds don’t yet have a product that makes money, and for others, the AI investment boom may remind them of earlier times when a project could get funded only by using the phrase “blockchain.”

But there is genuine interest from investors. AI made a significant appearance on the 2024 big ideas list of the massive venture capital firm a16z bitcoin, and startups with an AI connection are at the forefront of early 2024 startup investment.

This week, the game developer ArenaX Labs raised $6 million. The lab produced AI Arena, a player-versus-player game designed to teach viewers how to use artificial intelligence through gaming. Players in the game obtain NFT fighters, which they then train via imitation learning, which basically teaches the bot to repeat commands from the user.

In addition to SevenX Ventures, Xterio, FunPlus, and Moore Strategic Ventures, Framework Ventures led the round.

“The majority of consumers still see AI as a novelty that they could play around with briefly. Framework co-founder Michael Anderson stated in a statement that accompanied the announcement, “The ArenaX team is flipping this narrative by creating products that encourage normal people to begin learning to train AI through the language of play.”

This week, CharacterX raised $2.8 million to fund the development of its purportedly synthetic social network. Users can communicate with a variety of AI chatbots with various backstories using its smartphone app.

The round was co-led by INCE Capital, Spark Digital Capital, and Lightspeed Venture Partners.

Spark also joined in a $3.5 million fundraising round for AI marketplace Ta-da. The business leverages blockchain technology to maintain cost-efficiency and data transparency while aiming to sell data to AI companies for model training.

Ta-da was given the Morningstar Ventures incubator.