Sapphire – Market Memo, July 2024

In July 2024, venture capital investment reached $24B across 1.7K deals, with a slight increase in capital and a significant decline in deal count compared to the previous year. Revised data for June showed higher funding totals, contributing to an overall increase in Q2 numbers. Generative AI remains a dominant theme in technology and financial markets, but there are warnings of over-hype and bubble-like activity. Recent analyses have raised concerns about the scale and pace of AI capital expenditures, leading to increased scrutiny during earnings calls by major tech companies. Investors are now asking more pointed questions about the ROI on AI infrastructure investments, and executives are acknowledging the competitive market environment and potential impact of the technology by leaning towards over-investment. This shift indicates a potential transition in investor sentiment as the year progresses.