AI Startups Captured 58% of Global VC Funding in Q1 2025: Pitchbook
Artificial intelligence startups garnered the lion's proportion of global venture capital during the first quarter of 2025, a historic turnabout in investment trends.
Based on figures from Pitchbook, AI and machine learning startups received 57.9% of total VC funding across the world in Q1, double their 28% portion in the same quarter last year. The focus was even greater in North America, as 70% of VC money went into firms that focused on AI.
AI VC Funding Exceeds Half 2024 Level in Only One Quarter
Global AI startups raised a combined $73 billion in Q1 2025, already more than half the industry's total deal value for all of 2024.
One of the key drivers of this spike was OpenAI, which raised a record-breaking $40 billion SoftBank-led investment round on March 31. Other large deals included Anthropic's $3.5 billion Series E, demonstrating high demand for core AI infrastructure.
Pitchbook's report observed that investors are plagued with "AI FOMO" (fear of missing out), driving capital into the industry at breakneck pace.
"Tech trends are moving so quickly that investors feel they can't wait," said Maria Palma, General Partner at Freestyle Capital. "The need to succeed in your market has never been greater.
Yet, not everyone is certain that this rate is sustainable. Nnamdi Okike, a co-founder of 645 Ventures, warned that inflated valuations can be destabilizing. "Most VC firms are acting as if the only way is up—and that's usually a warning sign," he said.
~$154 million in venture funding this week.
— Messari (@MessariCrypto) March 28, 2025
Q1 closing with $7.3B+ raised across more than 550 rounds. https://t.co/aPQcrAdnG6
Crypto Funding Bounces Back but Lags Well Behind AI
As AI took over Q1 headlines, crypto and blockchain startups continued to experience a modest comeback. They raised $4.8 billion in venture capital in Q1 2025—significantly higher from a mere $1.1 billion in Q4 2024. It is the best quarter for crypto since Q3 2022.
Market confidence is gradually coming back to the space for digital assets, which has been buoyed by improving regulatory environments within the U.S.
Galaxy Ventures' Mike Novogratz is said to be close to raising a $180 million fund to invest in early-stage crypto startups by June. The fund will focus on blockchain payment projects and stablecoins, Bloomberg reported.
Haun Ventures, meanwhile, is readying two new funds worth a total of $1 billion—divided equally between early-stage and late-stage investments within the digital asset space.
In terms of performance, Paradigm tops the list of high-performing crypto VC firms, with a return of 11.80% in the last year. This is followed by Alliance (10.64%), Dragonfly (8.32%), a16z (6.94%), and Multicoin Capital (5.86%), according to Kaito AI.
Also Read: SEC Reveals Panel Lineup for April 25 Crypto Custody Roundtable
