Despite Venture Capital investing heavily in generated AI in the first half of the year, Irish AI startups find the funding environment “challenging,” a new report from consultancy EY found.
Between January and June, global venture capital investment in generated AI surged to $49.2 billion (42.5 billion euros) between January and June, surpassing all 2024 totals by $44.2 billion, according to EY Ireland's latest Generated AI Key Trading and Market Insights Survey.
The company said a sharp rise will occur as venture capital companies concentrate on AI companies that generate more mature revenues and fewer but significantly larger transactions. The average trading size for late-term transactions more than tripled from $481 million in 2024 to more than $1.555 billion.
Ey Areland's technology, media and telecom lead Grit Young said the investment momentum is expected to continue to increase later this year with the launch of a new generation AI platform.
However, the report is pointed out while Ireland is emerging as a powerful AI adopter among startups, many struggling with access to capital and infrastructure.
“In Ireland, the desire to adopt AI is strong and we work with many Indigenous and international companies that are already established in our AI journey,” Young said.
“But for AI startups, the funding environment remains challenging, especially in the financing sector of 1 million to 10 million euros.”
She added that many high potential startups are found in a difficult middle ground where “they are too aggressive in early stage support, but not big enough to attract the attention of global venture capital.”
“However, Ireland has a deeply established pool of talented entrepreneurs and there is a lot of opportunity to be seized as collaborations between businesses, founders, academic institutions and policy makers are increasing,” she said.
