AI Startups Capture 57.9% of Global Venture Capital in Q1 2025

In the first quarter of 2025, artificial intelligence startups secured a significant portion of global venture capital investments, according to data from Pitchbook. The research firm highlighted that 57.9% of global venture capital dollars in Q1 were directed towards AI and machine learning startups, indicating a strong investor interest in the sector. This figure represents a substantial increase from the 28% of VC dollars allocated to AI startups in the first quarter of 2024.

The concentration of capital in the AI sector was particularly pronounced in North America, where 70% of venture funding in the region went to AI startups during the first quarter. Globally, the AI sector raised $73 billion in the first quarter, which exceeded half of the total value of AI-related deals made in the previous year. A significant portion of this funding, over half, was attributed to OpenAI, which closed a $40 billion funding round led by SoftBank on March 31. Other notable AI funding rounds in March included Anthropic, which raised $3.5 billion in a Series E round.

Maria Palma, general partner at Freestyle Capital, commented on the intense competition and rapid technological advancements in the AI sector. "The fear of somebody else winning your market has never been higher than it is now," she said. "You haven’t seen a slowdown because the rate of change on the technology side is almost indigestible."

Nnamdi Okike, co-founder and managing partner at 645 Ventures, expressed caution about the current investment landscape. "There are extremes happening, and that’s going to mean there’s going to be a lot of losers," he warned. "A lot of VC funds are just kind of saying, ‘Hey, this can only go up.’ And that’s usually a recipe for failure — when that starts to happen, you’re becoming detached from reality."

In contrast, crypto and blockchain startups raised $4.8 billion in the first quarter, with nearly half of that amount, $2 billion, coming from an investment by Abu Dhabi investment firm MGX in Binance. This figure represents a significant increase from the $1.1 billion raised in the fourth quarter of 2024 and marks the largest quarter for crypto venture capital deal value since the third quarter of 2022. The resurgence in crypto venture capital is attributed to a more favorable regulatory environment in the US.