More than 220 U.S. startups that reached billion-dollar valuations during the venture capital boom are now classified as “fallen unicorns” due to declining valuations and difficulty raising new funding in the post-AI investment landscape, according to PitchBook data.

Five years ago, venture capitalists assigned billion-dollar valuations to startups across sectors—including lingerie subscriptions, pet food delivery, and scheduling software—often before the companies achieved profitability. The investment frenzy was fueled by cheap capital and heightened demand during the pandemic. The Federal Reserve’s interest rate hikes beginning in 2022 reduced market exuberance, and the advent of generative AI further disrupted prior assumptions about startup value.

Startups that last raised funding in 2021 are now worth 68% less on average, while those that raised in 2022 have seen average valuation declines of 52%, according to PitchBook estimates. Nearly half of the 857 U.S. unicorns have not secured new funding in the past three years, leaving their valuations outdated. Fallen unicorns include Glossier, The Farmer’s Dog, Rothy’s, Brooklinen, Savage X Fenty, AG1, Betterment, and SeatGeek.

Enterprise software companies have been especially hard hit, with 75 software-as-a-service (SaaS) firms among the fallen unicorns—double the number of fintech companies, the next-largest group. Generative AI has destabilized core assumptions of the SaaS model, which traditionally embeds software into employee workflows and charges per user. “The thesis I had was that all workflow-driven enterprise SaaS companies will be either disrupted or dead in the next decade,” David Zhu, former head of engineering at DoorDash, told CNBC.

“A lot of those companies are pre-AI, not just in their cost structure, but also in their products,” Mercury CEO Immad Akhund told CNBC. “All the attention’s on AI, so if you’re not an AI-first company, you need really strong numbers to raise.”

Investors have redirected capital toward AI-native firms, with more than $250 billion poured into OpenAI and Anthropic ahead of their expected 2024 initial public offerings. “The ChatGPT moment was when people said, ‘Holy smokes, the next generation of entrepreneurs, their coding language is spoken English,’” said Samir Kaul, partner at Khosla Ventures. “Now you’re seeing 50 engineers do what it would’ve taken 500 engineers to do five years ago.”