The 2024 CNBC Disruptor 50: The Selection Process

• A significant number of businesses on the 12th annual CNBC Disruptor 50 list consider AI as essential to their operations.
• The traditional concept of disruptive innovation is being challenged by AI as the new era of "improved, reduced, accelerated" innovation emerges.
• The most notable investments in AI startups over the past year have come from public giants such as Microsoft, Amazon, and Alphabet, with their funding of companies like OpenAI and Anthropic.

Welcome to Disruptor 50 in the age of AI.

Thirteen out of the 2024 Disruptors on our twelfth annual CNBC Disruptor 50 list classify artificial intelligence as "critical" to their businesses. This includes companies from various industries, including cybersecurity and agriculture. Additionally, five of the top ten Disruptors this year are generative AI companies.

The Disruptor 50 list, which was created over a decade ago, has been upended by these companies. Instead of focusing on cheaper and better innovation, achieving disruptive innovation with AI now requires significant capital investment and partnerships with incumbent giants.

Instead of Anthropic being an independent Amazon disruptor, it is now Amazon-backed and has received a $2 billion investment from Alphabet, challenging Microsoft-backed OpenAI as the top disruptor on the 2024 Disruptor 50 List.

The AI revolution has attracted significant investments from the venture capital community, with over $90 billion flowing to AI startups in 2023, according to PitchBook. Of the Disruptors, 17 have raised new funds in the past year, including 8 of the 13 generative AI startups, which raised a combined total of at least $5.5 billion.

The 2024 Disruptors have raised $70 billion, surpassing last year's $54 billion, and have a total implied valuation of $436 billion, the second-highest valuation ever for the 2022 $500 billion list.

The ability of established companies to invest in private disruptors allows many of the 2024 Disruptor 50 companies to delay going public, even as the IPO window reopens. We anticipate that first-time and second-time disruptors will continue to feature on future lists.

Here's how we chose them in 2024:

Eligible for the Disruptor 50 list were all private, independently owned startup companies established after January 1, 2009. To be nominated, companies had to provide a comprehensive analysis that included both quantitative and qualitative data.

The evaluation of the companies was based on various metrics, including company-submitted data on workforce size and diversity, scalability, and sales and user growth. Some of this information was kept confidential and used only for scoring purposes. In addition, CNBC obtained data from two external partners, PitchBook and IBISWorld, to assess fundraising, implied valuations, investor quality, and industry disruption.

The Disruptor 50 Advisory Board, comprising 50 prominent innovators and entrepreneurs worldwide, ranked the importance of quantitative criteria for disrupting industries and public companies. This year, the board identified scalability and user growth as the most critical factors, followed by sales growth and the use of groundbreaking technologies, including AI and machine learning. These categories were given the highest weighting, but the ranking model ensures that companies must excel in multiple areas to be included on the final list.

In addition to submitting crucial quantitative data, companies were also required to provide detailed qualitative information about their core business model, target customers, and recent achievements. A group of CNBC editors, including TV hosts, reporters, and producers, as well as bizfocushub.com writers and editors, along with several members of the Advisory Board, evaluated the submissions and offered comprehensive qualitative assessments of each company.

In 2024, CNBC established a Disruptor 50 VC Advisory Board to gain from the insights of top venture capital firms and investors. As part of the qualitative review process, each board member evaluated a select group of finalists. However, the VCs were not allowed to evaluate any company in their own portfolio.

The final list of the top 50 companies was determined by combining total qualitative scores with a weighted quantitative score.

Despite being in our twelfth year, we are still witnessing some "firsts" this year.

OpenAI is the first company to hold the No. 1 spot in consecutive years and only the second to do so more than once (SpaceX, No. 1 in 2014 and 2018, is the other). OpenAI's rapid growth and continuous innovation make it the world's most influential and powerful venture-backed startup.

Stripe's No. 1 Disruptor of 2020 has continued to innovate despite its valuation being slashed and its decision to stay out of the IPO market. However, this will be the last time Stripe qualifies as a Disruptor as it will "age out" of eligibility next year.