AI startups have raised $10.4 billion so far in 2025, marking the strongest start to a year for the sector, according to data from AltIndex.com. This follows a record-breaking 2024, during which AI startups secured $89.7 billion in funding, the highest annual total recorded. Despite challenges such as U.S. export restrictions on AI chips to China, concerns about AI company valuations, and mixed earnings reports from major firms in 2024, venture capital investment in AI remains robust.
In the first 45 days of 2025, AI startups raised $10.4 billion, exceeding the $8.4 billion raised in the first quarter of 2024. If no further funding rounds occur before the end of the quarter, Q1 2025 would still rank as the second-highest first quarter for AI startup funding. This figure represents half of the total venture capital investment in AI startups in 2020 and one-third of the annual totals for 2022 and 2023.
Several major funding rounds have contributed to this momentum. Elon Musk’s xAI is in discussions to secure $10 billion, while Figure AI is negotiating a $1.5 billion investment. Meta’s expansion into AI-powered humanoid robots has also drawn investor attention. Additionally, there has been a shift in investor focus toward practical AI applications, prompting startups to accelerate development efforts.
AI startup funding has outpaced other high-growth sectors. Since the beginning of the year, AI companies have secured three times more investment than fintech startups ($3.3 billion), 40% more than semiconductor firms ($6.4 billion), and are approaching biotech’s total of $12.1 billion.
The cumulative amount raised by AI startups has now reached $287 billion. U.S.-based companies account for approximately 65% of this total, or $189 billion, with California leading in investment volume. Asian AI startups have raised $52.1 billion, while European companies have attracted $34.5 billion. Within the AI sector, machine learning startups have secured the largest share of funding, with $131 billion raised, followed by AI software firms at $83.4 billion.
