AI Dominates 2025 VC Landscape with Record $192.7 Billion Investment

AI Is Dominating 2025 VC Investing, Pulling in $192.7 Billion

Venture capitalists poured $192.7 billion into AI startups so far this year -- setting new global records and putting 2025 on track to be the first year where more than half of total VC dollars went into the industry, according to data provider PitchBook. Most of the capital went to established startups - Anthropic and xAI both raised billions in funding this quarter -- while some other lesser-known upstarts struggled, especially companies that are not focused on AI. The hangover of a tight environment for public listings and acquisitions has also left some venture investors unwilling to make new bets on unproven companies, PitchBook found.

AI delivers record share of venture deal value in third quarter as fundraising slump continues - SiliconANGLE

AI delivers record share of venture deal value in third quarter as fundraising slump continues The global venture capital market held steady in the third quarter of 2025, propped up by artificial intelligence investments, but the recovery is narrow, concentrated in big rounds and exits. As a result, fundraising remains at decade-low levels, handing leverage to investors with dry powder, according to a first look at the quarterly PitchBook-NVCA Venture Monitor report released early Friday. In the third quarter of 2025, 64% of venture capital deal value went into AI companies, a record percentage. Only software-as-a-service and big data, both closely linked to AI, surpassed $25 billion in total investments this year. Fueled by AI, U.S. dealmaking is on track for a roughly 8% increase in total deal count over 2024, the report says, potentially making it the third most active year in the past decade. Exit activity in the U.S., particularly initial public offerings, was down in exit value from the second quarter but ranked as the second-highest valued quarter since 2021. Public listings, including reverse mergers, generated more value through the third quarter than mergers and acquisitions, despite mergers and acquisitions already exceeding 2024 levels. Not surprisingly, AI had a significant influence on exit numbers. In 2025, 40% of exit value has come from AI, with notable exits from companies like CoreWeave Inc., which went public in March. The 317 exits by AI startups have already set a record, highlighting investor enthusiasm for the sector across all markets. Through the quarter, $47.8 billion in new commitments have been raised by venture capital firms, with only 378 new funds closed. The U.S. fundraising market has remained stagnant this year due to liquidity shortages and uncertainties surrounding dealmaking. Though numbers may be down, there is hope: PitchBook noted that ongoing capital calls fueling the AI investment surge are likely to increase pressure on funds, drawing down their dry powder. And as exit markets start to open, the added liquidity is expected to facilitate capital recycling into VC, although the added liquidity may be selective. Europe and other regions tell a related but distinct story: AI is lifting deal value there as well, but fewer megarounds mean exits remain driven more by mergers and acquisitions than by public windows and fundraising sits at the lowest pace in a decade. The report argues that reopening IPO markets and larger cross-border listings would be critical to restore much-needed growth capital for the continent's scaling companies. In Asia and Latin America, activity in the quarter was patchy. Supply chain and manufacturing plays have climbed the sector rankings even as many markets contend with tariff uncertainty, reduced liquidity and a few outsized deals accounting for most regional totals. The key takeaways from the report for founders and limited partnerships are simple and stark: Capital is available but highly selective. Teams building genuinely differentiated AI primitives, horizontal platforms, or mission-critical vertical solutions will find buyers and favorable exits, whereas everyone else will face tighter terms and longer fundraising cycles.

AI Soaks Up Record VC Dollars, Leaving Other Industries on the Sidelines | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. "You're in AI, or you're not. You're a big firm, or you're not," said Kyle Sanford, director of research at PitchBook. His comment captures a venture market increasingly divided between a handful of AI giants and everyone else. The leaders are pulling in historic rounds. Anthropic closed a multibillion-dollar raise this quarter at a valuation above $180 billion, while Elon Musk's xAI also secured billions. Vercel raised $300 million at a $9.3 billion valuation, Supabase raised $100 million at $5 billion, and DualEntry pulled in $90 million in its Series A. Anaconda raised $150 million in July. These deals show how capital is clustering around infrastructure and developer platforms that are seen as central to AI's future. Behind the surge in AI investment lies a structural shift. Just 823 funds raised $80 billion globally in 2025, a steep fall from 4,430 funds raising $412 billion in 2022, according to Bloomberg. With fewer pools of capital, the pipeline of early-stage startups risks thinning out, as investors concentrate larger checks into established names rather than seed or Series A bets that could have grown into the next Anthropic or Stripe. "Backers of venture funds and partners of VC firms are being more deliberate about where they're putting their money," Sanford said. Increasingly, that deliberation means writing bigger checks into fewer firms with clear AI exposure. The shift reflects not only risk aversion but also limited partner pressure to show near-term results, and it raises concerns that the next generation of early-stage founders could be crowded out before they even get started. Bloomberg has reported that AI is already siphoning venture dollars away from other technology sectors, making it harder for non-AI startups to raise capital. At the same time, AI is among the most capital-intensive industries in tech. Citi projects that global spending on AI infrastructure could exceed $2.8 trillion through 2029. That pull is drawing capital not only to model developers but also to adjacent players in chips, cloud, and physical infrastructure. The result is a market where AI platforms and infrastructure startups are flush with resources, while companies in sectors like healthcare, mobility, and climate face slower deal cycles and smaller rounds. CFOs are also adding restraint. According to PYMNTS Intelligence, only 26.7 percent of finance leaders plan to increase generative AI budgets in 2026, down from 53.3 percent a year earlier. Half of firms reporting strong returns will expand spending, while just 16.7 percent of those seeing negligible ROI intend to do so. That split reflects what PYMNTS has called the ROI paradox: adoption is soaring, with infrastructure spending forecast to reach trillions, but the economics have yet to catch up. For now, AI dominates venture capital in scale and in focus. The money is flowing to a few large players while the rest of the industries see funding pools shrink.