Although the US government’s expanded export restrictions on AI chips to China, concerns about AI giants’ valuations and disappointing earnings reports in the first half of 2024 sent shockwaves through the market and caused mixed investor sentiment, AI start-ups still managed to make 2024 one of their best years so far. During the 12 months, these companies raised a record-breaking US$89.7 billion in funding rounds, the highest figure in the market’s history. However, the strong venture capital funding momentum continued in 2025, helping the AI sector to see the strongest start to a year yet.
According to data presented by AltIndex.com, AI start-ups raised US$10.4 billion year-to-date, turning Q1 2025 into their best first quarter so far.
Ever since the Nvidia boom, AI start-ups have been a shiny object for VC investors, attracting more fresh capital than most other sectors. That didn’t change in 2025, as several key developments brought new momentum to an already strong VC funding landscape.