Venture capitalists aren’t just funding AI—they’re increasingly using it to make investment decisions. This FOMO-driven trend sees VCs deploying algorithms to sift through startups, analyze market data, and predict winners in the funding race. With AI capturing nearly 58% of global venture funding in 2025’s first quarter, the machines are effectively choosing their own successors. It’s like asking Skynet which terminators deserve the next round of upgrades. The billion-dollar question remains: are human VCs becoming glorified button-pushers?
While money talks in every industry, venture capital is practically screaming about artificial intelligence these days. The numbers tell a jaw-dropping story: AI startups gobbled up nearly 58% of global venture funding in Q1 2025, more than doubling their share from just a year ago. That’s $73 billion flowing into AI companies in just three months. Let that sink in.
OpenAI’s eye-popping $40 billion round (yes, with a “b”) led by SoftBank has set a new standard for what “going big” means in venture capital. When a single deal represents over half of all AI investment in a quarter, you know we’re not in Kansas anymore.
SoftBank’s $40B OpenAI bet isn’t just raising the bar—it’s practically launching it into orbit.
Anthropic casually picked up $3.5 billion in its Series E, while eight early-stage AI players joined the $100M+ club this quarter. This AI-focused investment trend stands in stark contrast to the struggling non-AI sectors that are facing a severe funding crisis.
The driving force? Good old-fashioned FOMO. When Freestyle Capital’s Maria Palma notes that “fear of somebody else winning your market has never been higher,” she’s not just stating the obvious—she’s diagnosing an industry-wide condition. VCs are terrified of missing the next OpenAI, even if it means writing checks that would have seemed ludicrous just 18 months ago.
But here’s where things get dicey. As 645 Ventures’ Nnamdi Okike bluntly puts it, “there’s going to be a lot of losers.” The AI gold rush has investors becoming “detached from reality,” convinced that AI investments “can only go up.” If that sounds like bubble talk, well… *gestures broadly at everything*.
The money isn’t just flowing to the usual suspects, though. Fintech, digital health, and even the once-radioactive crypto sector are seeing renewed interest, with AI integration becoming the special sauce that makes any pitch more appealing. Organizations that leverage AI effectively can potentially see profit increases of up to 45%, further fueling the investment frenzy. The crypto space has experienced a remarkable comeback with North America’s dominance fueling $4.8 billion in funding for blockchain startups in Q1 2025.
The big question remains: is this irrational exuberance 2.0, or are we truly witnessing the dawn of an AI-powered economic revolution? With median deal sizes hitting a record $3.5M and billion-dollar exits breaking quarterly records, the market’s answer seems clear—at least for now.
