AI Dominates Global VC Funding With Nearly 60% Share in Q1 2025: PitchBook

AI Dominates Global VC Funding With Nearly 60% Share in Q1 2025: PitchBook

Artificial intelligence continues to dominate the global venture capital landscape in 2025, capturing nearly 60% of all VC dollars in Q1, according to a new report from PitchBook released on April 17.

In total, AI and machine learning startups raised $73 billion globally in the first quarter, more than double the share they claimed in the same period last year. In Q1 2024, just 28% of venture capital flowed into AI startups.

“Investors still have an AI FOMO [fear of missing out] problem,” PitchBook wrote, underscoring the surging interest in AI-driven innovation despite warnings of overexuberance.

OpenAI’s $40B Raise Boosts AI Investment Surge

The surge was largely driven by a historic $40 billion funding round for OpenAI, led by SoftBank and closed on March 31. That single deal accounted for over half of all AI venture capital raised in Q1.

Other standout raises included Anthropic’s $3.5 billion Series E round, signaling continued deep-pocket interest in foundational AI models and infrastructure.

North America led the charge geographically, with 70% of all VC funding in the region directed toward AI startups, the report noted.

“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.”

AI deals as a share of all global VC deal activity. Source: PitchBook

Caution Amid the Frenzy

However, some investors are sounding the alarm on what they see as unsustainable momentum in the AI investment space.

“There are extremes happening, and that’s going to mean there’s going to be a lot of losers,” said Nnamdi Okike, co-founder and managing partner at 645 Ventures.

“A lot of VC funds are just kind of saying, ‘Hey, this can only go up.’ And that’s usually a recipe for failure.”

The high valuations and breakneck pace of innovation are creating a high-risk, high-reward environment that could see significant shakeups in the months ahead.

Crypto VC Sees Modest Comeback

While AI has taken center stage, crypto and blockchain startups are beginning to show signs of revival in venture capital markets.

According to CryptoRank, crypto projects raised $4.8 billion in Q1 2025, marking the highest quarterly total since Q3 2022. This was a sharp jump from $1.1 billion in Q4 2024.

However, nearly half of that came from a single transaction: a $2 billion investment into Binance by Abu Dhabi investment firm MGX.

Still, momentum appears to be building. Regulatory clarity in the United States is improving, contributing to renewed investor confidence. One recent example is Galaxy Ventures Fund I, led by Mike Novogratz, which is on track to raise up to $180 million, surpassing its original $150 million target.

Conclusion

With AI commanding nearly 60% of all global venture capital in Q1 2025, it’s clear that the sector is in a hypergrowth phase. But with that growth comes the risk of overvaluation and market correction.

Meanwhile, crypto is slowly reentering the conversation, buoyed by regulatory progress and a few landmark deals. As both sectors evolve, Q2 2025 could be a defining period for venture capital trends across emerging technologies.