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Irish Independent
6 days ago
- Business
- Irish Independent
Flood of funds for AI in the US leaves Irish start-ups scrambling
Global venture capital (VC) investment in generative artificial intelligence (GenAI) shot up to $49.2bn (€42.5bn) in the first half of 2025, more than the $44.2bn total for all of 2024 and already double the 2023 full-year tally. However, analysis from global professional services giant EY shows the increasingly large sums are flowing to an ever-more concentrated pool of GenAI businesses, overwhelmingly in the US. EY Ireland's latest 'Generative AI Key Deals and Market Insights' study highlights how the sharp rise in overall deal value comes despite a near 25pc drop in the number of transactions in the first six months of 2025. In addition, early-stage VC funding rounds declined, and angel and seed rounds saw no change. That all points to a pattern of fewer but significantly larger deals hoovering up capital. The US accounted for 97pc of global deal value and 62pc of transactions. The Europe, Middle East and Africa (Emea) regions accounts for 23pc of volume but just 2pc of deal value. Of 39 global AI unicorns – private companies valued at more than $1bn – 29 are in the US, but just three are in Europe, EY said. US dominance in GenAI innovation and investment is widening EY Ireland's technology, media and telecoms lead, Grit Young, said GenAI is reshaping the investment landscape at an extraordinary pace – including a risk of squeezing out funding for small and mid-tier start-ups. 'Many high-potential start-ups find themselves in a difficult middle ground, too advanced for early-stage support, yet not quite large enough to attract global VC attention,' she said. Ireland has emerged as a strong adopter of AI, but many AI start-ups are struggling with access to capital and infrastructure. In Ireland, the funding environment for AI start-ups remains challenging, particularly in the €1m to €10m funding space, Ms Young added. Meanwhile, a relative handful of global-scale investments dominate the sector. Those have included SoftBank's potentially $40bn commitment to OpenAI, xAI's $10bn funding round, and major investments in Databricks ($5bn), Anthropic ($3.5bn), French start-up Mistral AI ($600m), and legal tech giant Harvey ($600m). EY's Ms Young said the pattern is clear. 'US dominance in GenAI innovation and investment is widening, with deal activity increasingly concentrated in North America,' she added. 'With increased regulatory divergence on AI between the US, Europe, China and beyond, it will be important for Europe to balance essential regulation with supporting and enabling innovation.'
Irish Examiner
6 days ago
- Business
- Irish Examiner
Venture capital funding environment for Irish AI start-ups 'challenging'
Despite venture capital investing heavily in generative AI during the first half of the year, Irish AI start-ups are finding the funding environment 'challenging', a new report from consultancy company EY has found. Between January and June, global venture capital investment in generative AI surged to $49.2bn (€42.5bn), outpacing the total for all of 2024 at $44.2bn, according to EY Ireland's latest Generative AI Key Deals and Market Insights study. The company said the sharp rise comes as venture capital firms concentrate on more mature, revenue-generating AI companies, resulting in fewer but significantly larger deals. Average transaction size for late-stage deals more than tripled to more than $1.55bn, up from $481m in 2024. EY Ireland's technology, media and telecoms lead Grit Young said this investment momentum was expected to continue to build into the second half of this year with the launch of new generative AI platforms. However, the report noted while Ireland had emerged as a strong adopter of AI among start-ups, many are struggling with access to capital and infrastructure. 'In Ireland, the appetite for AI adoption is strong, and we are working with many indigenous and international companies who are already well established on their AI journey,' Ms Young said. 'However, for AI start-ups, the funding environment remains challenging, particularly in the €1m to €10m funding space.' She added many start-ups with high potential were finding themselves in a difficult middle ground where they are 'too advanced for early-stage support, yet not quite large enough to attract global venture capital attention'. 'However Ireland has a deep and well-established pool of talented entrepreneurs, and with increased collaboration between businesses, founders, academic institutions and policymakers, there are plenty of opportunities to be seized,' she said.
Observer
03-08-2025
- Business
- Observer
Stock market IPOs up in the US and down in Europe
Worldwide, there were 539 stock market flotations in the first six months of the year, but despite Ireland's economy being generally strong within the European Union – particularly in terms of GDP per capita which is second only to Luxembourg – none of them in Ireland, even though new incentives were introduced in Budget 2025. The global IPOs raised $61.4 billion, a 17 per cent increase in value year-on-year, according to a new report by EY. It says that while there were no new listings in Ireland, investor sentiment remains positive. 'While Ireland has not seen IPO activity so far this year, the fundamentals remain strong. Investor sentiment is holding firm, and the pipeline of potential listings is healthy,' said Fergal McAleavey, a corporate finance partner at EY Ireland. 'Continued market stability will be key to unlocking that potential. America is leading the way in the number of flotations, with 109 so far this year, its best first-half performance since the peak in 2021. EY's Global IPO Trends report notes that cross-border listings are at a record high in the US, with almost two-thirds coming in from foreign countries. Companies from China and Singapore are 'leading the charge'. 'The US market's appeal stems from its deep capital pools, broader investor base and strong liquidity,' the report says. 'International issuers particularly value access to investors with an appetite for profitable, growth-oriented companies.' Europe, by contrast, experienced a notable slowdown in IPOs, with most of the big markets pausing following the turmoil set off by US president Donald Trump's announcement of reciprocal tariffs in April. The continent recorded just 50 IPOs, a 15 per cent drop year-on-year. Sweden was the only exception, with the Asker Health Group's IPO valuing at about 2.3 billion euros. China accounted for one in three of the global IPOs by value, surpassing the US in that category. India was the second most popular, with 108. The Irish Government introduced two measures in Budget 2025 to encourage investment, including a corporation tax deduction for expenditure incurred in listing shares of a company on any stock in the European Economic Area. McAleavey said this would be a 'nice benefit' for anyone who had decided to list, but not enough on its own to persuade them to do so. He said the attraction of the US, over Europe (which includes Ireland) was in its high level of liquidity, helped by a strong retail market, which resulted in companies being valued fairly. He pointed out that Irish companies can now raise hundreds of millions from private equity funds, which has made that route more attractive. A spokesman for Euronext, which runs the Irish stock exchange, said the introduction of a tax relief for IPO expenses was a welcome development, especially for smaller companies that would be the target for its new 'Access' market. 'Given market conditions, although we have a pipeline of potential IPO candidates, IPO activity is muted globally but we expect to see some activity when market conditions improve,' he said. Euronext has put forward a number of proposals for this year's budget, including a stamp duty exemption on the trading of shares in companies with a market valuation of less than one billion euros, and to increase the life-time limit for the Capital Gains Tax (CGT) entrepreneur relief by a further one million euros to two million euros. It is also proposing the creation of an incentivised savings and investment account scheme for Ireland, and an Irish Equity Market Growth Fund to provide equity finance to companies listed or intending to list, on Irish markets. (The writer is our foreign correspondent based in the UK)
Irish Examiner
27-06-2025
- Business
- Irish Examiner
Irish businesses willing to pay more for renewables amid fears for energy future
Almost seven in 10 (68%) Irish businesses are worried about securing enough energy to meet their future needs, new research reveals, with 96% of Irish companies saying they would pay more for quicker access to renewable sources. Already, data centres consume 10% of Ireland's energy, while the attacks on Iran's oil infrastructure shows the volatility of the fossil fuel market. With significant energy demand expected to increase, business leaders in Ireland and abroad are concerned about securing sufficient reliable energy to meet their future needs, according to the EY Ireland research. Almost seven in ten (68%) Irish businesses are worried about securing enough energy to meet future needs, while more than six in 10 (62%) say that rising and unstable energy costs are already impacting profitability and competitiveness. The findings are part of the latest EY Navigating the Energy Transition report, which surveyed over 2,400 decision-makers across eight countries, including 125 respondents in Ireland. In Ireland, over 85% of businesses surveyed expect their electricity consumption to increase in the very near term, with most sectors indicating a rise of more than 10% in the next three years. This demand is expected to be driven by a range of factors, including new equipment (42%), electric vehicles (41%), technology and data centres (40%) and increased use of artificial intelligence (40%). 'A secure, stable and sufficient energy supply is no longer just a commodity for businesses, increasingly it's a competitive asset that can enable or inhibit growth and operations, particularly during periods of global energy price and supply uncertainty such as at present," said Sean Casey, EY Ireland energy sector leader. An overwhelming 96% of all businesses surveyed said that they are willing to pay more for quicker access to renewables, for example via corporate power purchase agreements, while the installation of on-premise renewable generation and storage is an increasing focus for business leaders. "Businesses are increasingly looking at on-site generation and self-sufficiency, whether via solar panels, battery storage, or the use of smart technology to optimise energy use. From a sustainability perspective, this is very welcome, however businesses say they want both green energy and energy growth, not one or the other," said Mr Casey. 'A secure, stable and sufficient energy supply is no longer just a commodity for businesses, increasingly it's a competitive asset that can enable or inhibit growth and operations, particularly during periods of global energy price and supply uncertainty such as at present," said Sean Casey, EY Ireland energy sector leader. More than 69% of businesses are planning to increase their focus on electrification, emissions reduction and energy cost management in the next three years. Sustainability remains a key strategic priority, but not at the expense of growth. 'There is clear opportunity for energy providers to reshape themselves and redefine the business energy experience to meet customers' higher expectations and greater needs," said EY Ireland customer transformation leader Richard Hepworth.
Irish Times
15-06-2025
- Business
- Irish Times
A quarter of major US corporate backers pull out of Dublin Pride over Trump fears
More than one-quarter of the US multinational firms that sponsored past Dublin Pride events have pulled out this month due to the shift in US attitudes towards diversity, equity and inclusion (DEI) policies, organisers have said. Pride's co-chief executive Jed Dowling said 12 of 42 US firms that had recently been involved stepped away. He said 10 did so because of concerns over the Trump administration's threats to sanction firms with DEI policies it did not approve of. Speaking at a Pride at Work event, hosted by the Department of Justice on Friday, Mr Dowling said two of the 12 firms stated they could not offer financial support this year because of cuts to discretionary budgets related to wider financial performance or falls in share prices. READ MORE However, he said the event overall would be bigger this year because more new firms and community groups had become involved. Mr Dowling declined to name the firms that have withdrawn support. However, recruitment firm Indeed and Mastercard are known to be among those that have stepped away. He said most of the major US firms from the banking and pharma sectors that have previously backed the event will again be involved. Those partnering again this year include Citibank, Bank of America, Dell, Pfizer and Abbvie. Some of those that have departed remain supportive, with Indeed understood to be one such firm. In a statement on Friday another traditional backer, EY Ireland, said it was 'very much looking forward to once again participating in Dublin Pride' and would be organising a number of events around it. Trayc Keevans, who advised major multinationals on investment in Ireland for international recruitment firm Morgan McKinley, said the departure of some firms did not necessarily mean a shift in corporate values. 'The reduction in public sponsorships reflects a broader shift in how multinational organisations are supporting DEI initiatives,' she said. 'Rather than wavering on their overall commitment to DEI, we are seeing they are being more intentional about deploying resources where they can have the most meaningful impact, particularly through internal programmes that directly benefit their employees and local communities while balancing that with the complex regulatory environment their parent companies are operating within.' Firms, she said, were conscious of the need to be able to continue to bid for public sector contracts in the US and were adapting their support for inclusion programmes and initiatives to ensure they avoided sanctions. Addressing the Pride at Work meeting, Mr Dowling said the organisation was launching individual memberships in an attempt to keep people involved with the organisation even if their employer has disengaged. [ Trump's vanity takes a hit as modest crowd for military parade overshadowed by 'No Kings' protests across country Opens in new window ] 'Where your connection to the community has been facilitated by your company, what happens when you're in one of those dozen American companies who say 'we don't support diversity and inclusion anymore, we don't have that anymore', and suddenly your whole connection is gone?,' he said. This year's Dublin event culminates in the traditional parade through the city centre on June 28th, which thousands of people are expected to participate in. Events are being billed as a celebration of the 10th anniversary of Ireland's vote in favour of marriage equality.
