David Edwards
According to fresh data released by PitchBook, artificial intelligence startups dominated global venture capital fundraising in the first quarter of 2025, driven by an overwhelming investor fear of missing out (FOMO).
According to a report released by the research firm on April 17, 57.9% of all venture capital funds worldwide during that time were allocated to AI and machine learning projects. Compared to the same time last year, when AI startups only received 28% of venture capital funding, this represents a startling surge.
With 70% of venture capital in North America going to AI-related businesses in Q1 2025, the region turned out to be an even more concentrated market for AI funding.
The quarter saw $73 billion in sales for the global AI industry, which is more than half of the total amount of AI-related transactions in 2024. A large amount of this money came from OpenAI’s $40 billion round, which concluded on March 31 and was led by SoftBank. The $3.5 billion Series E investment from Anthropic was one of several significant investing rounds.
The extraordinary rate of technical advancement driving the investment boom was highlighted by Maria Palma, general partner at Freestyle Capital. “You’ve never been more afraid of someone else taking your market than you are right now,” she remarked. “You haven’t seen a slowdown because the rate of change on the technology side is almost indigestible.”
But there are warning voices coming out. The managing partner and co-founder of 645 Ventures, Nnamdi Okike, cautioned that the speculative craze may result in large losses.
“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 said.
In the meantime, there are indications of a cautious recovery in the cryptocurrency space. According to CryptoRank, $4.8 billion in venture capital was raised by blockchain and cryptocurrency firms in the first quarter of 2025. This amount represents a significant comeback, with investment more than quadrupling from the $1.1 billion raised in the fourth quarter of 2024, even though it is still swamped by AI funding. Since Q3 2022, the increase is the strongest quarter for the value of cryptocurrency venture capital deals.
