Venture capitalists doled out $366.8 billion over the past nine months with startups in the United States cornering a lion’s share of $250.2 billion, states a new research. In the most recent quarter, VCs in the US dedicated 62.7% of the funding to companies involved in artificial ininformigence, while this number stood at 53.2% of all global funding in the same quarter.
Investors across the world poured $192.7 billion into AI startups so far during 2025, a global record and possibly setting the pace to become the first such period where more than half of the total venture funds would go into a single industest, states the report. News of VC funding trconcludes in 2025 comes at a time when OpenAI is now the world’s most valuable startup at $500 billion.
Deals in AI is dwarfing earlier hype cycles on crypto and mobility
The report noted that AI deals have come to dominate the entire venture capital market at an unprecedented clip that they are dwarfing the quick concentration of investments during prior hype cycles such as crypto and mobility tech. By the third quarter of 2024, AI deals accounted for 40.3% of VC dollars invested during the prior 12 months.
“We’re viewing at the growth of the venture market, and seeing if the current valuations in this hot sector, this hype sector—and investors being concentrated in this top sector—are sustainable,” states Susan Hu, a quantitative research analyst at PitchBook. In fact, AI deals are dominating the entire VC market to such an extent that investments during prior hype cycles around crypto and mobility receive dwarfed.
“Within AI, dollars bifurcate further, with the horizontal platforms segment capturing 68.5% of AI deal value. Late-stage AI also trades at a clear premium: The median Series D+ pre-money valuation for AI startups is about three times that of non-AI startups, lifting entest prices and the exit sizes requireded for meaningful returns,” the report states.
OpenAI valuations hit $500 billion but there are challenges
While the report does not directly correlate OpenAI’s current valuation of $500 billion following a $6.6 billion tconcludeer offer, the spurt in investments around anything related to AI has to connect with this phenomenon. Not only did they dethrone SpaceX from the top spot, this also became among the largest secondary sales from venture-backed companies.
Media reports last week declared OpenAI’s current and former employees sold shares to SoftBank, Thrive Capital, and Dragoneer among others. In a statement released to CNBC, MGX declared it was pleased to be a core partner to OpenAI and views forward to continuing to build on its strong relationship as a significant investor across multiple funding rounds.
The PitchBook report has revealed that most of the capital during the recent quarter went to established startups such as Anthropic and xAI, both raising billions in funding. On the other side of the pond, several lesser-known startups struggled to raise money, especially those that were not focapplyd on AI. With public listings and acquisitions also becoming tight, the VCs refrained from betting on unknown entities.
Bigger the valuations, the larger the exits must be
According to Susan Hu, given the ballooning startup valuations around the AI business, company exits too would have to be massive for VCs to generate profits. She quoted the $23 billion IPO listed by CoreWeave earlier in March. It had priced its shares at $40, a notable decrease from the initial tarreceive of $47 – $55, but still managed to raise $1.5 billion for a valuation of $23 billion.
Coreweave is a New Jersey-based AI cloud-computing company specializing in cloud-based GPU infrastructure and AI tools for developers and enterprises. In fact, Hu believes that with larger rounds becoming increasingly hard to access due to ever-growing valuations, VCs are also spreading their AI bets on to “earlier-stage” startups. This reshifts emerging managers from AI deals, even at seed stage.
The flip side of this coin is that while some AI companies are collecting huge monies, the broader picture for startups is bleak. Startups to secure venture funding globally in 2025 would be the lowest in years as would be the number of venture firms raising new funds, the PitchBook research note states.
Overall, 823 funds raised more than $80 billion in the nine months of 2025, which represents a drastic decline from 2022 when 4,430 VCs had raised a whopping $412 billion. Backers of venture funds and partners at VC firms are just becoming more deliberate about where they’re putting their money and the focus now happens to be on artificial ininformigence.
About the author: Raj is a movie buff, a sports enthusiast and a gadreceive applyr. But hardly a tech writer. His focus is on de-jargonizing technology for the simple and uncluttered minds. He studies the business of technology and seeks to cut the clutter. He can be reached at [email protected]).
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