- AI startups dominated global venture capital in Q1 2025, securing 57.9% of all funding compared to 28% in Q1 2024.
- OpenAI‘s massive $40 billion funding round led by SoftBank contributed significantly to the $73 billion raised by the AI sector.
- Crypto venture capital showed signs of recovery with $4.8 billion raised in Q1 2025, though still dwarfed by AI investments.
Artificial Intelligence startups captured nearly 58% of all global venture capital investments during the first quarter of 2025, according to new research from Pitchbook. This dramatic concentration of funding represents a significant increase from the first quarter of 2024, when AI startups received just 28% of total venture capital dollars.
Pitchbook attributed this surge to ongoing investor anxiety about missing out on potential AI breakthroughs. "Investors still have an AI FOMO [fear of missing out] problem," the research firm said in their April 17 report. The trend was even more pronounced in North America, where AI startups claimed 70% of all regional venture funding during the quarter.
The global AI sector raised a staggering $73 billion in Q1 2025, exceeding half the total value of all AI-related deals made throughout the previous year. A significant portion of this funding came from OpenAI, which closed a record-breaking $40 billion investment round led by SoftBank on March 31. Anthropic also secured a notable $3.5 billion in Series E funding during March.
Industry Experts Warn of Market Extremes
Maria Palma, general partner at Freestyle Capital, explained the aggressive investment pattern: "The fear of somebody else winning your market has never been higher than it is now. You haven’t seen a slowdown because the rate of change on the technology side is almost indigestible."
Some venture capitalists are expressing caution amid the frenzy. Nnamdi Okike, co-founder and managing partner at 645 Ventures, warned that current market conditions reflect concerning extremes. "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," he noted.
Crypto Funding Shows Signs of Recovery
By comparison, cryptocurrency and blockchain startups raised just $4.8 billion in the first quarter of 2025, according to CryptoRank. However, this represents more than four times the $1.1 billion raised in Q4 2024, marking the strongest quarter for crypto venture capital since Q3 2022.
Nearly half of that total—$2 billion—came from Abu Dhabi investment firm MGX investing in Binance. Despite being overshadowed by AI investments, crypto venture capital appears to be warming up as a more favorable regulatory environment emerges in the United States.
On April 17, Mike Novogratz’s Galaxy Ventures Fund I was reportedly set to exceed its $150 million funding target, potentially reaching $180 million when it closes at the end of June.
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