AI-Native vs. AI-Late Ecosystems: Measuring the Global Gap on First-Movers (and How to Close It)
Key Insights
AI funding is hyper-concentrated: 80% flows to just three regions — Silicon Valley (65%), Beijing (10%), and Paris (4%).
Only eight ecosystems are “AI-native”: they direct ≥15% of funding to startups built on AI-first DNA.
Major hubs at risk: Los Angeles, Tel Aviv, and London allocate <10% to AI-native ventures, jeopardizing their tech leadership.
The stakes: AI could add $15.7 trillion to global GDP by 2030. Lagging ecosystems risk economic decline, talent flight, and strategic irrelevance.
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For instance, Databricks, a leading big data company founded by Apache Spark creators, ranks high on some AI funding lists but isn't considered AI-native because AI wasn't foundational at its inception – it started as a big data company. For a detailed description of our AI-Native definition, please see here. |
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To find out the answers to this and measure the global gap on AI first-movers, we conducted the most extensive study of AI-native startup ecosystems yet, analyzing:
Over five million companies
More than 350 startup ecosystems worldwide
Data from Crunchbase, Dealroom, Pitchbook, and local partners
Three critical insights emerged.
AI Funding is Hyper-Concentrated — Nearly Double the Concentration of Overall Tech
The data reveals a winner-takes-most reality: Silicon Valley alone attracts over 65% of global AI-native funding — double its share of general tech funding (32.2%).
Beijing and Paris round out the “AI Big Three,” collectively controlling nearly 80% of global AI investment:
Silicon Valley (65.1% of all AI-native global funding)
Beijing (10.0%)
Paris (4.3%)
Source: Startup Genome proprietary data, Crunchbase, Dealroom, and Pitchbook. AI-Native funding for 2023 and 2024
Only Eight Global Ecosystems are Truly AI-Native
Of the world’s top 40 tech ecosystems, only eight have 15% or more of its total venture funding going to AI-native startups.
These eight ecosystems are the highest ranking geographies in our AI First-Mover Ecosystem Score. The score measures the share of all funding in the ecosystem that went to AI-native companies.
A surprise takeaway: Beijing now leads in AI deal concentration, though Silicon Valley dominates in absolute dollars.
Source: Startup Genome. Delta to Global Ranking compares ecosystem’s ranking in the AI First-Movers list versus it’s ranking in the overall Global Startup Ecosystem Ranking – which measures startup ecosystem performance across all tech sectors, not just AI
Major Ecosystems at Risk: LA, Tel Aviv, and London
Transitioning to an AI-native focus has proven challenging globally.
Surprisingly, some major tech centers traditionally leading innovation currently direct less than 10% of their funding to AI-native companies, placing their ability to lead future innovation at serious risk.
Despite their global tech clout, Los Angeles, Tel Aviv, and London risk obsolescence by underinvesting in AI-native innovation.
This is dangerous for each ecosystem:
LA: Strong in media-tech but AI funding lags at 8.7%.
Tel Aviv-Jerusalem: Cybersecurity leader, yet AI-native investment sits at 6.5%.
London: Europe’s fintech capital risks stagnation with only 5.8% AI funding.
But they are not alone having a hard time transitioning to an AI focus. The bigger picture is that 27 of the top 40 ecosystems in the Global Startup Ecosystem Report 2024 are “AI-lagging,” with <10% of funding to AI-native startups. It does not have to be this way. Leading startup accelerators like Y Combinator and Techstars have proven “centers of excellence” and targeted investments can be built: over 75% of their recent cohorts are explicitly focused on AI. If these accelerators were considered standalone ecosystems, they would outperform even Silicon Valley and Beijing in AI-native company concentration.
The Cost of Complacency: Three Existential Risks
Ecosystems failing to prioritize AI-native ventures risk substantial losses:
Economic Decline: Missed GDP growth, corporate relocations, and shrinking tax bases. According to PwC, AI could add $15.7 trillion to global GDP by 2030.
Talent Flight: Startup talent and capital drain toward AI-native ecosystems.
Strategic Vulnerability: AI-native ecosystems will control defense, healthcare, and energy innovation.
The Path Forward: Five Non-Negotiable Actions
The message is clear: Ecosystems must aggressively prioritize AI-native initiatives or face long-term economic decline.
All ecosystems still have a chance — but the window is rapidly closing. Immediate action, bold policy choices, and strategic investment are no longer optional — they are imperative.
Leaders must urgently and strategically act to close the AI-native gap:
Founders: How can you inspire new and serial founders to start AI-native?
Talent: How can you help your startups compete for AI talent against large corporations offering a lot more money?
Programs: How can you reduce the death rate with specialized programming?
Funding: How can you accelerate and increase the size of local AI funding rounds so they compete with top AI ecosystems?
Corporations: How can you engage local corporations in your local startup community so they have access to crucial data and lead customers?
Follow our AI series as we reveal key ecosystem challenges and policies crucial to responding to the AI Revolution.