AI Startups Raise $10.4B YTD, A Record-Breaking Start to the Year

February 16, 6:44 pm

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 startups still managed to make 2024 one of their best years so far. During the twelve months, these companies raised a record-breaking $89.7 billion in funding rounds, the highest figure in the market's history. However, the strong VC 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 startups raised a whopping $10.4 billion year-to-date, turning Q1 2025 into their best first quarter so far.

One-Third of 2022 and 2023's Total Raised in 45 Days

Ever since the Nvidia boom, AI startups 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.

Significant investments in key companies like Elon Musk's xAI, which is in talks to raise $10 billion, and Figure AI, negotiating $1.5 billion, alongside new AI applications like Meta's AI-powered humanoid division, have sparked an even bigger investor interest. At the same time, investors have shifted focus to practical AI solutions, pressuring startups to accelerate AI development. This perfect storm of events has resulted in the strongest start to a year this market has ever seen.

According to Crunchbase data, in just 45 days, AI startups raised a whopping $10.4 billion, $2 billion more than in the first three months of 2024. Even if there were no additional funding rounds by the end of the quarter, which is highly unlikely, Q1 2025 would remain the second-strongest first quarter for VC investments this market has ever seen.

To put this figure into perspective, it took only 45 days of 2025 for AI startups to raise half the value VC investors poured into this market throughout 2020, or one-third of the annual total in 2022 and 2023.

AI Startup Funding Outpaces Other High-Growth Sectors

It's interesting to compare AI startup funding to other sectors that also attract significant VC investments. Since the beginning of the year, AI startups have raised three times more money than fintech startups ($3.3 billion), 40% more than semiconductor companies ($6.4 billion), and only $1.7 billion less than the biotech sector ($12.1 billion).

With $10.4 billion of fresh capital injected into the AI startup market, the total amount raised by these companies has surged to $287 billion. Around 65% of that value, or $189 billion, went to companies in the United States, with California leading the charge, proving the US leadership in the AI industry.

Asian AI startups raised the second-highest total, at $52.1 billion, while European companies follow with $34.5 billion. Crunchbase data also show that machine learning startups lead in funding activity, with $131 billion raised so far, followed by AI software companies at $83.4 billion.

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