AI-Fueled Funding Surge Lifts US Startups as VC Fundraising Lags Behind

The AI gold rush is giving US startups their second-best start to a year ever, but the same can’t be said for venture capital funds trying to keep up with investor caution and tighter liquidity.

According to fresh data from PitchBook, US startup funding totaled $162.8 billion from January through June 2025, up about 75.6% compared to the same period last year. It’s the most robust half-year showing since the record levels seen in 2021, when pandemic-era near-zero interest rates sent waves of capital flooding into high-growth bets.

This year’s spike is being driven by bold bets on artificial intelligence, a trend that gained momentum after ChatGPT’s breakout moment in late 2022. In the second quarter alone, US startups brought in around $69.9 billion in new capital. Major deals stood out: OpenAI landed a huge $40 billion round, while Meta’s (NASDAQ: META) stake in Scale AI came in at $14.3 billion, underlining just how much big tech is fueling the sector.

Other billion-dollar AI investments in the same period included Safe Superintelligence, Thinking Machine Labs, defense tech firm Anduril, and language tool company Grammarly. Together, AI-related startups made up more than 64% of total deal value and roughly 36% of deal volume so far this year, PitchBook found.

Investors say the excitement is far from over. Davis Treybig, a partner at Innovation Endeavors, noted that the breakneck pace at companies like OpenAI and Anthropic is setting off a rush to fund the next big thing — whether that’s in robotics, advanced biological models, or video generation. “If there’s any chance to replicate that kind of breakthrough in other fields, you’ll see huge money follow,” Treybig said.

Yet while cash pours into startups, the firms behind them are feeling the pinch. So far in 2025, venture funds have raised just $26.6 billion across 238 funds — about 33.7% less than this time last year — and the slow pace is stretching out timelines. PitchBook’s numbers show the median time to close a new fund has climbed to 15.3 months, the longest in over ten years.

This fundraising slowdown reflects investor worries about performance and the limited cash many institutions have available for riskier assets. The picture could brighten in the months ahead, though. Recent signs show a pickup in IPOs and M&A deals, helping unlock capital stuck in aging portfolios. Exit activity jumped about 40% in the second quarter from a year ago, thanks to looser antitrust policies and a warming IPO market.

PitchBook noted that listings in AI, cybersecurity, defense tech, and fintech — sectors seen as priorities under President Trump — are driving most of the public offering momentum. Lucas Swisher, co-head of growth investing at Coatue, said a handful of recent IPOs have been well received, including Hinge Health and CoreWeave, both Coatue portfolio companies. “We’re finally seeing the window start to reopen, and there’s a healthy pipeline waiting,” Swisher said.