Tech5: India's tech startup funding lags in 2024, global AI market could reach $1 trillion by 2027, and other updates.

India’s tech startups have seen a decline in funding in 2024, with $7.6 billion raised between January 1 and September 13, a 7% drop compared to $8.2 billion during the same period in 2023 and a significant 66% decrease from $22.4 billion in 2022, according to Tracxn, a private markets intelligence firm. Despite this, six new unicorns have emerged in 2024, compared to just one in 2023, and the number of IPOs has doubled, with 29 tech companies going public, up from 15 in the same period last year. The top cities for startup funding this year include Bengaluru, Mumbai, and Gurugram. Overall, India ranks fourth globally in terms of its startup ecosystem, trailing only the US, UK, and China, with 136,000 startups in total and 99 active unicorns.

Meanwhile, Bain & Company’s latest tech report projects that the AI sector could grow annually by 40% to 55%, potentially reaching $990 billion by 2027. Key growth areas include larger AI models, enterprise and sovereign AI initiatives, and improved software efficiency. As AI demand rises, the need for large-scale data centers is expected to grow significantly, with power demands potentially increasing from 50-200 megawatts to over a gigawatt in the next five to ten years. Costs for these data centers may also surge from $1 billion to between $10 billion and $25 billion. A 30% spike in demand for GPUs and components could lead to supply chain challenges similar to those experienced during the pandemic, further complicated by geopolitical tensions.

In the US, OpenAI has pitched the development of massive 5-gigawatt data centers, capable of consuming as much power as a city, to maintain competitiveness against China. These facilities could power nearly 3 million homes, and OpenAI emphasized the economic and national security benefits during discussions with US government officials.

In Europe, Northvolt, the largest battery startup in the EU, plans to cut 1,600 jobs, or 20% of its global workforce, in response to production challenges, weak demand, and increasing competition from China.