AI startup investment kept rising in Q3 according to new data

The global venture capital landscape saw a dramatic shift in the third quarter of 2025, according to latest industry data. For three consecutive quarters, artificial intelligence startups have been the focal point for investors, commanding a record share of funding as other sectors struggle to regain momentum.

AI Dominates Deal Activity

In the most recent quarter, AI companies accounted for 64% of all venture capital deal value—an all-time high—with the software-as-a-service and big data sectors, both closely tied to AI, being the only others to exceed $25 billion in investment this year[1]. While U.S. deal activity is on track for an 8% year-over-year increase, this trend is largely propped up by AI, and the broader market fundraising environment remains at its lowest point in a decade[1].

Exit Markets Reflect AI’s Outsize Influence

AI’s impact is evident in exit activity as well. In 2025, 40% of exit value has come from AI companies, with 317 AI startup exits already setting a record for the sector[1]. Notable examples, such as CoreWeave Inc., which went public in March, highlight the growing appetite for AI-focused listings. Despite a dip in exit value from the second quarter, U.S. public listings—including reverse mergers—outpaced merger and acquisition exits in value, signaling a strong IPO window for mature AI ventures[1].

Regional Variations and Selective Capital

Outside the U.S., the story is similar but nuanced. AI is lifting deal values in Europe and beyond, though fewer mega-rounds mean exits are driven more by mergers and acquisitions than by public listings. Fundraising across these regions is at its slowest pace in ten years[1]. In Asia and Latin America, venture activity is patchier, with supply chain and manufacturing sectors climbing the rankings amid market uncertainties and a few outsized deals dominating regional totals[1].

What This Means for Founders and Investors

• Capital remains available, but it is highly selective—only firms building differentiated AI tools, horizontal platforms, or mission-critical vertical solutions are likely to secure favorable terms and quicker exits[1].
• All others face tighter fundraising cycles and more challenging valuation environments.
• The reopening of IPO markets and cross-border listings is seen as critical to restoring growth capital, especially for scaling companies outside the U.S.[1]

Global Trends and the Road Ahead

Globally, AI startups have drawn in 46% of venture funding in 2025, amounting to approximately $45 billion[2]. This dominance highlights the sector’s resilience and the ongoing investor enthusiasm for AI innovation, even as broader tech fundraising slumps.

For entrepreneurs, the message is clear: AI is not just a trend but the engine of venture capital’s current recovery. However, amid narrowing opportunities, differentiation and real-world impact will separate the winners from the also-rans in the years ahead.