The first quarter of 2025 has shown a stark contrast in venture funding between cryptocurrency and artificial intelligence. According to data from Pitchbook, crypto venture funding in the U.S. reached roughly $861 million, significantly overshadowed by AI’s impressive haul of nearly $20 billion. This trend highlights a concerning pivot among investors away from crypto and towards the burgeoning field of AI.
Investors engaged in 795 deals in the AI sector within the US during the first three months of the year, with notable transactions capturing headlines. For instance, Databricks’ $15.3 billion funding round and Anthropic’s $2 billion raise stood out as major milestones in this sector.
In contrast, the largest deal within the cryptocurrency space was Abu Dhabi’s MGX, which made headlines with a $2 billion investment into Binance. Other significant investments included an $82 million raise by payment infrastructure provider Mesh, ETF issuer Bitwise’s $70 million round, and a $58 million offering by digital asset bank Sygnum.
Prior reporting by Pitchbook emphasizes the growing dominance of AI startups, which attracted one-third of global VC investment in 2024, totaling an astounding $131.5 billion. In comparison, crypto managed to garner only $4.9 billion across merely 706 deals.
This begs the question: Has AI effectively siphoned off venture dollars that once flowed to crypto? The reality is multifaceted. Major funding rounds and public figures within the AI sector—such as OpenAI’s Sam Altman, who is aiming for trillions to reshape the AI business landscape—have drawn public attention and possibly, investor confidence. AI has transitioned from a technological novelty to a household name, largely credited to innovations such as transformer models.
Statistical analysis indicates that VCs have historically favored AI over crypto, with AI and machine learning attracting consistent, exponential funding, as reported by Statista. Funding for AI surged from $670 million in 2011 to $36 billion in 2020, showing a pronounced and consistent trajectory.
Interestingly, there has only been one year where crypto funding eclipsed that of AI’s, albeit under specific conditions. A narrow definition by ABI Research estimated AI funding at $22.3 billion in 2021, allowing crypto to outpace it briefly during a bullish cycle, before AI funding soared past $100 billion by 2024.
It is essential to note that this narrative overlooks unique practices within the crypto space, such as airdrops, which allocate fresh capital to users, consequently inflating token prices and the overall size of projects’ treasuries. As a recent report from Dragonfly suggested, the eleven largest airdrops from 2020 to 2024 generated $7 billion. While this figure does not narrow the funding gap between AI and crypto, it illustrates that there are alternative avenues for capital beyond traditional venture investments.
