AI Continues to Dominate VC Funding Over Crypto in Early 2025—But Does It Matter?
Despite crypto’s “Trump bump” at the end of 2024, venture capital funding in the U.S. still leans heavily toward artificial intelligence. But is this a true shift in investor preference or just a natural cycle?
In the first quarter of 2025, U.S.-based crypto startups secured around $861 million in funding. However, AI companies attracted nearly $20 billion, according to data from Pitchbook, underscoring the massive gap between the two sectors.
From January to March, AI startups closed 795 deals, including major rounds like Databricks’ $15.3 billion raise and Anthropic’s $2 billion funding round, both of which dominated headlines.
In contrast, crypto’s biggest deal was Abu Dhabi’s MGX investing $2 billion into Binance, marking the first institutional placement in the exchange. Other notable deals included Mesh’s $82 million funding round, Bitwise’s $70 million raise, and Sygnum Bank’s $58 million investment.
Has AI Permanently Outpaced Crypto in VC Investment?
AI’s dominance in venture funding isn’t new. In 2024, AI startups secured $131.5 billion globally across 4,318 deals, making up one-third of total VC investment. Meanwhile, the crypto sector raised $4.9 billion across just 706 deals, according to prior Pitchbook reports.
Historically, VCs have consistently favored AI over crypto. Data from Statista shows that AI and machine learning funding has steadily expanded, growing from $670 million in 2011 to $36 billion in 2020, and continuing to rise.
The only year where crypto surpassed AI in venture funding was 2021, when blockchain startups attracted $30 billion, outpacing AI’s $22.3 billion (per ABI Research).
Beyond Venture Capital: The Crypto Airdrop Effect
While VC funding favors AI, crypto has other ways of injecting capital into projects. A report from Dragonfly found that between 2020 and 2024, the 11 largest airdrops distributed $7 billion to users.
Airdrops don’t replace VC funding, but they provide crypto startups with fresh liquidity, increasing token prices and project treasuries—something AI startups don’t have in their arsenal.
So while AI continues to capture the lion’s share of venture funding, crypto remains a unique asset class with its own alternative funding mechanisms. Whether this means AI has definitively “won” the battle for investor dollars remains up for debate.
