In the first quarter of 2025, the landscape of venture capital funding witnessed a striking shift, with artificial intelligence (AI) pulling ahead of cryptocurrency by a substantial margin. According to Pitchbook data, crypto venture funding in the U.S. reached around $861 million, while AI attracted nearly $20 billion. This stark contrast highlights the growing investor interest in AI technologies.
The Rise of AI Funding
Between January and March 2025, AI startups closed a remarkable 795 deals in the United States. Notable funding rounds included Databricks securing $15.3 billion and Anthropic raising $2 billion, both of which made headlines and underscored the robust appetite for AI investments.
In contrast, the largest crypto deal during the same period was a $2 billion investment from Abu Dhabi’s MGX into Binance, marking the first institutional placement in the prominent crypto exchange. Other significant crypto funding rounds included $82 million from payment infrastructure company Mesh, $70 million from ETF issuer Bitwise, and $58 million from digital asset bank Sygnum.
Crypto vs. AI: A Yearly Funding Comparison
Looking at the broader picture, previous reports from Pitchbook indicated that AI startups captured one-third of global VC investment in 2024, totaling $131.5 billion. This surge in funding was notable, with nearly 25% of new startups being AI-focused across 4,318 VC deals. In contrast, cryptocurrency garnered only $4.9 billion across 706 deals during the same timeframe.
Historically, AI has consistently outpaced crypto in terms of venture capital funding. Data from Statista reveals that funding for AI and machine learning has seen exponential growth, rising from $670 million in 2011 to $36 billion by 2020. In fact, there has only been one year where crypto funding exceeded that of AI, and that was during a specific bullish cycle in 2021.
The Unique Case of Airdrops in Crypto
It is essential to consider the unique dynamics within the crypto space, such as airdrops. Airdrops distribute new tokens or cryptocurrencies to users, which can lead to increases in token prices and inflate project treasuries. A recent report from Dragonfly highlighted that between 2020 and 2024, the 11 largest airdrops generated an impressive $7 billion. While this does not fully bridge the funding gap between AI and crypto, it indicates that alternative funding mechanisms exist beyond traditional venture capital.
Conclusion: What Does This All Mean?
As AI continues to dominate VC funding, questions arise regarding the implications for the cryptocurrency sector. The significant disparity in funding suggests a shifting investor sentiment, but it remains to be seen whether this trend will hold long-term. The evolving landscape of technology and investment strategies indicates that both AI and crypto will have their unique roles to play in the future of venture capital.
