Venture Capital Concentration Hits New High as AI Startups Absorb $73B
Artificial intelligence startups seized nearly 60% of global venture capital in Q1 2025, pulling in $73 billion—with OpenAI’s historic $40 billion funding round leading the charge.
AI is not just a hot trend; it’s reshaping the nature of international investment. According to a recent PitchBook report, AI and machine learning companies accounted for 57.9% of global venture capital (VC) investment in the first quarter of 2025.
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That figure more than doubles the 28% share AI startups captured in Q1 2024. The $73 billion raised this year is already over half the total AI-related funding secured in all of 2024.
A major contributor to this surge was OpenAI’s landmark $40 billion funding round, led by SoftBank and closed on March 31. This single deal represented more than half of all AI funding for the quarter.
North America: Ground Zero for AI Venture Capital
North America remains the epicenter of AI funding. PitchBook data shows that 70% of venture capital dollars in the region flowed into AI startups in Q1. Institutional investors, Silicon Valley firms, and global players are aggressively vying to back the next wave of intelligent systems.
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Other notable March deals include Anthropic’s $3.5 billion Series E round, with continued momentum seen in companies like Mistral AI, Cohere, and Perplexity AI.
AI deals as a share of all global VC deal activity (Source: PitchBook)
FOMO and the Hype Cycle: Boom or Bubble?
“The fear of somebody else winning your market has never been higher than it is now,” said Maria Palma, general partner at Freestyle Capital. “You haven’t seen a slowdown because the rate of change on the technology side is almost indigestible,” she added.
But not all voices are optimistic. Nnamdi Okike, managing partner at 645 Ventures, cautioned that extreme behaviors are emerging. “That’s going to mean there’s going to be a lot of losers,” he warned. When investors believe valuations can “only go up,” he added, “you’re becoming detached from reality.”
Industry analysts are voicing concerns that the surge in pre-revenue and early-stage deals could inflate valuations and trigger eventual shakeouts.
Crypto Venture Capital Creeps Back
While AI grabs headlines, crypto and blockchain ventures are showing signs of life. Venture capital funding in the sector reached $4.8 billion in Q1 2025—quadruple the $1.1 billion raised in Q4 2024.
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A significant portion of that came from Abu Dhabi’s MGX, which invested $2 billion into Binance. Meanwhile, Galaxy Ventures—run by crypto investor Mike Novogratz—is reportedly on track to surpass its $150 million target, possibly hitting $180 million by its June close.
Despite the excitement, the scale and speed of AI investment have triggered debates about sustainability. Some see echoes of the dot-com bubble, while others believe AI marks a genuine technological inflection point.
Either way, one thing is clear: AI is no longer a side bet. It has become the central narrative of global innovation—and now, investors must learn to separate substance from hype.
