In 2025, AI became the new gold rush, soaking up over half of all venture capital money worldwide, with the U.S. investing even more heavily.
This massive flood of cash into AI, far more than anything seen before, has venture capitalists scrambling to invest in anything with “AI” in its name.
While exciting, this intense focus on AI leaves other important sectors struggling for funding.
The author wonders if this is smart investing or just a wild craze, like past booms that ended in busts.
It makes you think about who wins and who loses when everyone chases the same dazzling new tech.
How much venture capital investment is going into AI?
In the first half of 2025, AI startups captured 53% of global venture capital investment, with the U.S. seeing an even higher proportion at 64% of VC dollars targeting AI deals. This highlights AI’s dominant position in the current venture capital landscape, drawing significant capital worldwide.
Remembering the Spark
Sometimes, a headline yanks me straight back to a sunlit coworking loft in Chiang Mai—crowded tables, espresso thick as treacle, the air dense with possibility. Just last week, sifting through PitchBook’s latest release, a cold shiver ran down my spine—not nostalgia, but the raw awe that numbers can bring. PitchBook, for the uninitiated, is like the Bloomberg Terminal for venture capitalists.
In 2018, a friend tried to raise for his SaaS venture in Silicon Valley. He’d quip, “If I don’t slap ‘AI’ on my deck, they’ll never call back.” That used to sound like a joke. Not anymore. Now, it’s the punchline and the setup.
The emotion that hit me was somewhere between disbelief and exhilaration. Staggering, really. Have I ever underestimated a tech trend so completely? Let’s just say I’ve learned to double-check my hunches—especially after missing that early wave in mobile apps.
The Avalanche of Capital
The data? Blunt. In the first half of 2025, AI startups captured 53% of global venture capital investment. Let that percolate: more than half, worldwide. The U.S. topped even that, with 64% of VC dollars targeting AI deals. That’s not just a trend—it’s a monsoon. (And yes, I checked the math twice.)
Imagine venture capitalists jostling for any startup with “transformer” or “LLM” in the pitch deck. It’s a digital gold rush—except instead of pickaxes, you’ve got API calls and neural nets. The numbers are loud, not subtle: $73 billion flowed into AI startups in Q1 alone. No sector, not dotcoms, not e-commerce, not even blockchain, has ever hoovered up so much at once. My coffee nearly spilled when I read that nearly a third—29%—of all funded startups globally were AI ventures.
OpenAI’s rumored $40 billion SoftBank round, Anthropic’s meteoric rise, and vertical AI startups (legal, medical, logistics) are all vacuuming up cash. In Q2, more than a third of U.S. venture funding went to just five AI companies. That’s not diversification; that’s going all-in on a single hand. Frankly, it smells a bit like tulip mania—at least to the cautious part of me.
The Shadow Over Other Sectors
I can’t help but ask: What about cybersecurity, clean energy, or the once-glamorous VR? There’s a faint scent of singed ambition for any founder with a pitch that doesn’t spell out artificial intelligence. Sometimes, promising startups get left in the dust because they aren’t on the AI bandwagon. Oof.
A partner at Sequoia Capital confessed to PitchBook, “The fear of someone else winning your market has never been higher.” I picture a roomful of GPs—nervous, hopeful, a bit desperate, clutching pitch decks and sweating over a demo that’s mostly a fancy interface for OpenAI’s backend. The atmosphere is electric, like the charged air before a thunderstorm.
Curiously, some deals are starting to feel less like traditional VC and more like project finance—huge sums, but maybe a lower chance for outsized gains. Is this a fever dream, or has the money crowd lost the plot? Even now, I wonder if tomorrow’s unicorns will be found in the margins, overlooked by the crowd.
Herds, Hype, and Humanity
Why does it always end up like this? Maybe it’s just human nature. In Silicon Valley, the stampede effect has always been strong, but this time, the stakes feel positively existential. The herd surges forward, convinced that AI isn’t just the next big thing—it’s the only thing.
These figures aren’t just statistics; they’re a mirror reflecting both hope and hype. Even the air in those VC boardrooms must taste different—charged, metallic, almost like ozone before a lightning strike. Sometimes, I ask myself: Are we living in a fever, or making history?
One last question nags at me. Who gets left behind when all eyes are on the AI prize?
