According to PitchBook’s new report released on Tuesday, startup funding in the United States increased by 75.6% during the first half 2025. It reached $162.8 Billion.
The performance is the best since the beginning of 2021, when venture capital was at its peak under the Zero Interest Rate Policy that followed the Pandemic.
The sharp increase in this year is fueled by the excitement surrounding artificial intelligence, as well as a number of large bets made by major investors and tech companies.
US startups have raised $69.9 billion over the last three months, a large majority of which was devoted to AI.
OpenAI, with its $40 billion blockbuster round of funding, was the most notable. Meta Platforms followed it up by acquiring a share in Scale AI for $14.3 billion.
Other notable AI investment of billions in the second quarter include Safe Superintelligence (thinking Machine Labs), Grammarly and Anduril, a defense technology startup.
The deals show that investors are increasingly confident in AI and its disruptive potential.
Davis Treybig is a partner with Innovation Endeavors. He said: “I believe it’s a downstream effect of OpenAI and Anthropic continuing to grow at an unbelievable rate.”
If there is even the slightest chance that you can see this sort of progress elsewhere, such as in robotics, video or world models, and protein folding models then a great deal of people will want to spend a large amount of money.
The report states that AI represented 64.1% in total value of deals and more than a third for all transactions during the first six months of this year.
As LPs are cautious, fundraising slows down
Venture capital funding was more conservative despite the booming startup activity.
In the first six months of 2018, VC funds raised just $26.6 billion, spread across 238 different funds. This represents a decline of 33.7% from 2024.
The timelines for fundraising are getting longer.
By the end of second quarter, the median closing time for a new VC Fund had reached 15.3 months — the longest period in over a decade.
This is attributed to the report to concerns about liquidity and to the few successful exits that have occurred in recent years. Some limited partners were prompted to reduce or halt their investments due to these factors.
The IPO market and M&A Markets are showing signs of life
There are signs that optimism is returning in the world of exits despite the slowdown.
The second-quarter exit activity increased by 40% compared with the previous year’s period, fueled in part by a more accommodative environment for antitrust and a tentative reopening the IPO window.
PitchBook reports that sectors with a focus on President Donald Trump’s policy — such as AI, national defense, defence technology, fintech and crypto — have dominated interest in recent IPOs.
Lucas Swisher is the co-head for growth investments at Coatue, a tech investment company.
The market has been very positive about IPOs, such as those of Coatue’s portfolio companies Hinge Health or Coreweave. There are now a dozen firms that have filed.
Venture capital investors could benefit from a boost in confidence if exits continue to increase.
AI is the driving force behind what may be the best year for US startups funding in the last decade.
As updates occur, this post AI boom brings US startup funding to near-record highs could be changed.
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