Over half of the quarterly AI startup investments were brought in by a March $40 billion funding round secured by the industry leader – OpenAI.
The latest Pitchbook report on global VC capital investments revealed that almost 58% of all venture capital deals in the first quarter of 2025 went to startups linked with artificial intelligence (AI) and machine learning (ML). In North America, that share grows to 70.2% of the total deal value.
AI startups aggregated $73.1 billion in Q1. More than half of that sum ($40 billion) went to the creator of the popular ChatGPT bot, OpenAI, in a March funding round led by SoftBank.
The same month, Anthropic raised $3.5 billion in a Series E round led by Lightspeed Venture Partners, with participation from Salesforce, General Catalyst and Fidelity.
Although some large deals have already taken place last quarter, this year might still have its fair share of new solid AI investments. Thus, robotics startup Figure AI is reportedly negotiating a soon-to-come financing round valued at $1.5 billion, which will increase the company’s valuation to $39.5 billion.
The share of total VC capital funnelled into AI projects is growing at an extraordinary rate. To compare, in early 2022, that share was only about 17%, and even in the first quarter of 2024, we saw only 28% of all VC dollars addressing AI startups.
In 2024, investments in projects linked to innovative AI technology skyrocketed, illustrating a 62% growth, while overall startup funding declined by a dozen percentage points. AI investments also took up a record 46.4% of the total amount raised in 2024, $209 billion. This way, AI startups made significant contributions to the recovery of US venture capital funding from market lows last year. Thanks to their successful funding rounds, the total amount of raised capital increased by almost 30% compared to the figure for 2023. This year, AI investments still grow unabated.
Experts link such unprecedented investor interest not only to the vast potential of AI but also to the fear of missing out (FOMO). Maria Palma, general partner at Freestyle Capital, stated that the fear of competitors taking over the market was greater than ever. She explained that there hadn’t been a slowdown in investments because the pace of technological change was nearly impossible to keep up with.
Nnamdi Okike, co-founder and managing partner at 645 Ventures, remarked that the surge of venture capital into AI companies would likely lead to highly uneven investment outcomes. He observed that many extreme situations were unfolding, such as several VC funds operating under the assumption that the market could only rise. That attitude, he warned, was typically a sign of detachment from reality and a potential precursor to failure.
Okike expressed specific concern about investors making large bets in areas lacking a clear return on investment. He cautioned that the incessant influx of capital triggered by the code word – AI, rather than tangible benefits, could divert startups from focusing on building sustainable businesses early on. He added that when a new market emerges, venture capitalists often lose perspective and rush in without fully grasping the fundamental economics of the sector, pointing out that the financial viability of many such ventures remained uncertain.
