Global VC funding hits $113 billion in first quarter driven by outsized AI deals

New reports out today from Crunchbase Inc. and PitchBook-NVCA Venture Monitor reveal that global venture capital rebounded sharply in the first quarter of 2025, posting its strongest performance since mid-2022.

However, both datasets point to a growing division in the startup ecosystem where a small set of companies and sectors, particularly artificial intelligence, are capturing an outsized share of investment.

According to Crunchbase, total global startup funding reached $113 billion in the first quarter, up 17% from the previous quarter and an impressive 54% year-over-year. Though the headline figure is positive, the number was slanted by one single deal: OpenAI’s $40 billion round on a $300 billion valuation announced on March 31.

The OpenAI deal represented more than half of U.S. venture capital funding and a third of the global total. AI funding as a whole hit $59.6 billion, or 53% of global VC activity in the first quarter.

According to PitchBook, 77% of U.S. deal value went to AI, largely thanks to OpenAI. In the words of Kyle Stanford, director of U.S. Venture Research at PitchBook, the U.S. market “has become very bifurcated between a handful of companies able to raise an endless amount of money and the rest of the market that continues to struggle through a capital shortage.” Even without the OpenAI round, AI still captured 48.5% of the total invested in the quarter and one-third of completed deals.

The surge in AI funding also contributed to a dramatic uptick in late-stage deals, which reached $81 billion in the first quarter, according to Crunchbase. Late-stage deals were up 30% from the fourth quarter of 2024 and 147% year-over-year. Conversely, early-stage funding declined slightly to $24 billion, while seed-stage investments dropped 14% year-over-year, to $7.2 billion — a sign that while capital is flowing freely to established players, newer startups are finding it harder to secure backing.

The concentration of capital wasn’t limited to AI. The Crunchbase report notes that healthcare and biotech were the second-largest sector, with $18 billion in funding, followed by financial services at $10.8 billion.

Geographic disparities are also shown in both reports. The Crunchbase data showed that U.S.-based companies attracted $80 billion of global VC funding, roughly 71% of the total. Of that, the San Francisco Bay Area alone accounted for $55 billion, making up 69% of all U.S. deal flow and nearly half of global funding. By comparison, PitchBook reported that venture capital in the Asia-Pacific region remained subdued, with fewer deals but larger average check sizes, most notably Binance’s $2 billion round in March.

Exit activity in the quarter showed a similar concentration at the top as venture capital funding. Crunchbase reported that the first quarter was the strongest merger and acquisition quarter for startups since 2021, with $71 billion in exit value and 12 acquisitions exceeding $1 billion. Google LLC’s pending $32 billion acquisition of cybersecurity firm Wiz Inc. could become the largest acquisition of a venture-backed private company in history if finalized.

Though the headline figures lok strong, there are possibly dark clouds ahead given declining commitments to VC funds. PitchBook estimates that there was $10 billion in new U.S. VC commitments secured during the quarter, the lowest fundraising pace since 2016. PitchBook argues the lack of liquidity from exits is deterring limited partners from making new commitments, placing additional stress on emerging managers and smaller funds, particularly outside the U.S.

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