North America Continues to Lead in AI Venture Funding Despite Challenges
Despite facing challenges in AI research and development, North America remains at the forefront of AI venture funding, according to data from investment tracker PitchBook.
Between February and May of this year, VCs invested a total of $69.7 billion in North America-based AI and machine learning startups through 1,528 deals. In comparison, European AI ventures received $6.4 billion across 742 deals during the same period.
On the other hand, Asia-based startups saw lower investment levels, with VCs contributing $3 billion to AI ventures in the region across 515 deals.
Under the leadership of President Donald Trump, the U.S. has made significant cuts to scientific grants related to basic AI research, imposed restrictions on foreign students specializing in AI, and threatened university AI labs by freezing federal funds. These actions, coupled with trade policies like retaliatory tariffs, have created a challenging environment for new AI ventures.
AI pioneer Geoffrey Hinton called for Elon Musk to be expelled from the British Royal Society due to the perceived damage caused by his association with the cost-cutting initiatives of the Trump administration.
Despite Europe’s efforts to become a global leader in AI and the EU’s substantial investments in AI development, there has not been a significant shift in venture capital towards the region. Similarly, China, home to notable AI startups, has not seen a substantial increase in VC activity.
In 2024, North American startups received 75.6% of all VC AI funding, amounting to $106.24 billion. This dominance has continued into 2025, with North American AI investments representing 86.2% ($79.74 billion) of global VC funding for AI.
Despite challenges and uncertainties, investors continue to look to the U.S. for innovation and high returns in the AI sector.
