AI Dominates Venture Capital Market, Accounting for Over Half of Deal Value

AI Dominates Global VC Investments in First Half of the Year
Over 50% of Total Deal Value Concentrated in Artificial Intelligence

In the first half of this year, artificial intelligence (AI) effectively dominated capital flows in the global venture capital (VC) market. While the total number of VC investments worldwide declined, the amount of investment was heavily concentrated in AI, with AI accounting for more than half of total deal value.

According to the "2025 First Half Global AI Report" released this month by the U.S. law firm Ropes & Gray on August 19, 51% of global VC deal value from January to June this year was related to AI. This figure has surged more than fourfold from 12% in 2017 over the past eight years. During the same period, the total number of VC deals decreased by 12% year-on-year, but funding for AI expanded, making the trend of "AI concentration within the VC market" increasingly clear.

The report stated, "AI is more than just a technological trend; it is a key variable that determines corporate survival," and added, "In a survey conducted by accounting and management consulting firm PwC targeting global CEOs, 40% of responding companies said, 'If we fail to adapt to AI within the next 10 years, we will not survive.'"

Companies are making large-scale investments to secure AI capabilities. Meta led a $14.3 billion funding round for Scale AI, a data labeling and model evaluation company, while OpenAI acquired AI-based smart device developer io Products for $6.5 billion. ServiceNow acquired generative AI platform Moveworks for $2.9 billion, and CoStar Group acquired spatial data company Matterport for $2.2 billion, resulting in a series of mega-deals.

Private equity (PE) funds have also been highly active. In the first half of this year, there were 155 AI-related PE deals, a 49% increase compared to 104 deals in the previous year.

The report analyzed, "While the total number of AI-related transactions (including M&A, PE, and VC) decreased by 20% year-on-year, the total deal value increased by 127%," adding, "This demonstrates that companies are paying significant premiums to secure promising startups and AI technology talent."

By region, the two AI powerhouses, the United States and China, accounted for 53% of all AI deals (by number) and 75% (by value), driving global capital polarization. Both governments are providing large-scale support in their competition for AI supremacy. In particular, in China, the "National Artificial Intelligence Industry Investment Fund," an AI-related fund worth $8.2 billion, is being established in the second half of this year, which is expected to reshape the investment landscape.