New data shows how AI is dominating startup investments, with 2025 expected to be the first year AI secures over half of all venture capital funding.
AI Dominance in Venture Capital Investment
PitchBook reports that venture capitalists have invested $192.7 billion in 2025, out of a total of $366.8 billion. In the latest quarter, AI represented 62.7% of funding from U.S. VCs and 53.2% from global firms.
Much of this funding is going to leading companies like Anthropic, which recently announced a $13 billion Series F. However, the number of startups and venture funds raising capital is at its lowest in years.
Decline in Overall Startup Funding
According to PitchBook, only 823 funds have been raised globally in 2025, substantially down from 4,430 in 2022. This indicates a tightening market for non-AI startups seeking investment.
PitchBook’s research director, Kyle Sanford, stated that the market is becoming “bifurcated,” meaning it’s increasingly divided between firms involved in AI and those that are not.
Challenges for Non-AI Startups
As AI startups thrive, non-AI startups struggle to secure funding. VCs are prioritizing investment in AI technologies, making it harder for traditional companies to attract capital.
This shift in investment trends may reshape the startup landscape, concentrating resources in the AI sector and leaving other industries facing significant hurdles.
