Venture capitalists are flooding the artificial intelligence sector with unprecedented sums, reshaping the global funding landscape and leaving non-AI startups struggling to survive.
Bloomberg cites PitchBook to show that AI startups have already drawn $192.7 billion in funding this year — putting 2025 on track to become the first year in history when more than half of all venture capital dollars flow into the tech industry.
Most of that capital has gone to the largest players. Anthropic and xAI both raised multi-billion-dollar rounds this quarter, while smaller and non-AI startups face shrinking access to capital. PitchBook says the imbalance has reached extreme levels across the market.
Says Kyle Sanford, a PitchBook director of research,
“Everywhere we look, the market is bifurcated. You’re in AI, or you’re not. You’re a big firm, or you’re not.”
The data shows the divide clearly. US venture capital firms allocated 62.7% of invested dollars to AI startups in the most recent quarter, while global investors put 53.2% into the sector. That concentration has driven total venture investment to $366.8 billion so far this year, with $250.2 billion of it coming from the US.
But the boom has not lifted the broader startup ecosystem. The number of companies securing venture funding globally is on pace to be the lowest in years, and the number of venture firms raising funds has collapsed.
Pitchbook data shows that globally, 823 venture funds have raised just over $80 billion this year — a steep decline from three years ago, when 4,430 funds raised about $412 billion.
Sanford says the shift reflects how venture capitalists now prefer to pour their money into AI firms.
“They’re focusing it on AI.”
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