AI Firms Capture the Majority of Global Venture Capital in 2025
Artificial intelligence (AI) startups are capturing the lion’s share of venture capital (VC) investment in 2025, according to new data from PitchBook. The report shows that U.S. venture capitalists allocated 62.7% of total investments this year to AI-focused companies, while global investors dedicated 53.2% of all VC funding to AI ventures.
In total, global venture deals have reached $366.8 billion so far in 2025, with $250.2 billion coming from the United States alone. This surge underscores how AI technologies have become central to the global innovation economy, driving massive investment into large language models, robotics, automation tools, and other AI applications across industries.
Early-Stage and Non-AI Startups Struggle to Raise Capital
While AI startups thrive, early-stage firms and those outside the AI sector are facing major funding challenges. Investors are increasingly concentrating their resources on proven AI companies with clear paths to profitability.
“Everywhere we look, the market is bifurcated,” said Kyle Sanford, Director of Research at PitchBook. “You’re in AI, or you’re not. You’re a big firm, or you’re not.”
This growing divide highlights a bifurcation in the venture landscape, where AI leaders secure abundant capital while smaller, non-AI innovators compete for shrinking investment pools.
Global Venture Capital Activity Slows Down
Despite the massive flow of capital into AI, the overall venture funding environment is cooling. PitchBook’s data shows that the total number of companies securing VC funding in 2025 is projected to be the lowest in several years.
Only 823 venture funds have raised about $80 billion globally this year, a sharp drop from 4,430 funds that raised $412 billion in 2022.
This decline reflects growing investor caution, driven by a subdued IPO market and limited merger and acquisition activity. With fewer exit opportunities, investors are becoming more selective, prioritising startups with near-term commercial potential, especially those leveraging AI to solve real-world problems.
AI’s Dominance Spans Global Tech Hubs
The AI investment boom extends across Silicon Valley, Asia, and Europe, as robotics, automation, and software companies continue to attract large-scale funding rounds. From generative AI models to industrial automation, firms are racing to build scalable business models powered by artificial intelligence.
“Backers of venture funds are being more deliberate about where they’re putting their money,” Sanford added. “And they’re focusing it on AI.”
Long-Term Optimism Despite Overvaluation Concerns
While some analysts warn of potential overvaluation in the AI sector, most remain confident in its long-term growth trajectory. Even if market corrections occur, AI is expected to remain a core pillar of venture investment due to its wide-ranging industrial applications in healthcare, manufacturing, and finance.
Investors are betting that AI will not only reshape global industries but also deliver the next wave of technological and economic transformation.
Key Takeaway
The 2025 venture capital landscape is increasingly AI-driven, with record funding levels for artificial intelligence companies and dwindling support for non-AI startups. While the market faces a broader slowdown, AI’s transformative potential continues to attract investors seeking scalable innovation and commercial viability.
