PitchBook: AI startups received 53% of all global VC dollars invested in H1 2025, rising to 64% in the US, and accounted for 29% of all global startups funded
Artificial intelligence is eating venture capital. Or at least its dollars. … - That percentage jumps to 64% in the U.S.
Context & Ripple Effects
PitchBook’s earlier coverage showed AI and machine-learning companies taking 23% of 2023 venture deals, followed by AI raising nearly half of U.S. startup funding in Q2 2024. The H1 2025 figures extend that shift from a strong funding category into a dominant destination for venture dollars.
The contrast between AI’s share of funding and its share of funded companies matters: capital is concentrating in a narrower set of AI-backed companies rather than being distributed evenly across the startup market.
First-order effects
- AI startups, particularly in the U.S., gain a disproportionate share of the capital available for larger rounds relative to their share of funded companies.
- Non-AI startups compete for the remaining pool of venture dollars, while investors’ near-term deployment becomes more dependent on AI deal selection.
Second-order effects
- Because AI captures far more dollars than companies, average AI-backed financings are likely larger than those elsewhere in the startup market, increasing the advantage of companies able to support capital-intensive growth plans.
- The allocation reinforces investor incentives to prioritize AI exposure; the earlier rise in AI's share of 2024 U.S. deal value suggests this is a continuing portfolio-construction shift rather than an isolated quarter.
Third-order effects
- If the pattern persists, venture markets may become more bifurcated: a small group of AI companies attracts increasingly large rounds while a broader set of startups faces a more selective financing environment.
- The longer-run question is whether concentrated AI funding produces durable independent companies or increases reliance on a limited set of well-capitalized investors and infrastructure partners.
The trend: Venture capital is shifting from broad startup exposure toward concentrated, large-ticket AI investing, especially in the U.S.