Venture capital investment in AI companies reached $338 billion globally in 2025, representing 82% of all venture capital deployed. Non-AI startups are finding it increasingly difficult to raise funding.
The concentration is extreme. The top 10 AI funding rounds of 2025 totalled $94 billion — more than the entire VC market in 2019. These mega-rounds went to Anthropic, OpenAI, xAI, Mistral, and other frontier AI labs.
Non-AI founders describe a 'crowding out' effect. VCs who previously invested across sectors are now focused almost exclusively on AI, leaving founders in other domains — climate tech, biotech, consumer — competing for a shrinking pool of capital.
Some investors are starting to push back against the AI frenzy. 'Not every company needs to be an AI company,' warned one prominent VC. 'We're seeing founders shoehorn AI into their pitches to attract funding, regardless of whether it makes the product better.'