The venture capital landscape has shifted dramatically in 2025, with a stark emphasis on all things artificial intelligence (AI). This is a fascinating contrast to the PitchBook reality, which reports just 823 funds raised globally this year. That’s a dramatic difference compared to the 4,430 successful funds raised in 2022. That’s reflected in the startup and venture fund trends, both of which see less and less successfully raising money. In fact, they’ve reached the bottom levels we’ve ever seen them at in years.
Described with monetary terms, venture capitalists have dumped a record $192.7 billion into the industry by 2025. In fact, this figure alone makes up almost half of the total expected federal funding of $366.8 billion planned for the year. AI has the potential to improve how investments are being made in a very fundamental way. In the latest quarter, it was responsible for 62.7% of the cash that U.S. venture capitalists deployed. From a global perspective, AI investments account for 53.2% of all funding activity.
Here are some highlights from Kyle Sanford, PitchBook’s director of research, about the changing trendlines and market conditions. He highlighted a stark bifurcation in the venture capital ecosystem. He stated that firms are increasingly divided into two categories: those “in AI, or not” and those “a big firm, or not.” Investors are more interested in companies whose strategic focus is on generative AI technologies. Accordingly, it will be difficult for smaller or no AI companies to get funded.
This squeeze is telling of the times for many startups and emergent venture funds. All the successful, happy fundraising activities are going away. This trend further illustrates the intense competition of the VC space, as larger firms continue to dominate investment opportunities.
Bloomberg’s coverage of this trend emphasizes how AI’s influence is reshaping investment strategies and priorities among venture capitalists, underscoring a potential systemic shift in funding approaches. Read more on what firms are doing to adjust to this new reality. We look forward to learning how the smaller players are overcoming these challenges, especially what techniques and strategies they are using to lure investment.
