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As the flow of venture capital to artificial intelligence and machine learning startups jumped 72% in 2025, a notable milestone was reached: for the first time, more venture capital dollars were allocated to such companies than to all other sectors combined.
Global funding for AI startups stood at $270.2 billion, or 52.7% of the total $512.6 billion in venture capital investments, according to a study. analysis by BestBrokers, a provider of information services for traders.
Despite this sharp rise, the total number of VC deals declined for the third year in a row, particularly in the fourth quarter, when the 9,844 deals recorded were the lowest number of quarterly deals since the start of 2020. And yet, it was during this recent fourth quarter that VC funding for AI and machine learning startups surpassed all other VC investments for the first time.
In fact, there are now fewer transactions, but more large transactions, reflecting a similar trend in M&A activity. The largest took place in the first quarter of 2025, when SoftBank invested $40 billion in OpenAI. This is the largest investment ever made in a private company. Another milestone came a few months later, when Thinking Machine Labs secured $2 billion in seed funding, the most it had ever seen.
Other major deals include Meta’s $14.3 billion investment in Scale AI and Anthropic’s $13 billion funding round, at a valuation of $183 billion.
“Venture capital firms have moved to a more selective phase, focusing on startups with proven enterprise applications or those developing critical AI and cloud infrastructure,” wrote Paul Hoffman of BestBrokers.
Regionally, of the $270 billion invested by venture capital firms in AI last year, 79.3% was in North America. Europe accounted for 13.6% and Asia 5.7%, while Latin America accounted for only 0.5%.
Hoffman noted that many of the most funded startups, including Thinking Machine Labs and Safe Superintelligence, were founded by former OpenAI staffers. Calling this a clear indication of the clustering of AI expertise in elite startups, he added: “While this concentration drives rapid technological advancements in companies with the resources to support them, it also intensifies competitive pressure on new entrants. »
As recently as 2023, AI accounted for just over a quarter (27.5%) of the global value of venture capital deals. This share accelerated to reach 40% the following year and again to reach 52.7% in 2025.
Meanwhile, on the output side, the overall value of AI and machine learning outputs stood at $242.4 billion, or about 40% of the total output value. The corresponding figures for 2024 were only $73.6 billion, or 22%.