AI boom drives global VC funding to record $300bn

BENGALURU: Global venture funding hit a record $300 billion in the Jan-March quarter, the highest ever for a single quarter, according to Crunchbase data. The surge, driven largely by artificial intelligence deals, has reignited the debate on whether venture markets are truly recovering or if capital is concentrating in a narrow set of companies.

Nearly 80% of the funding went to AI startups, with four companies - OpenAI, Anthropic, xAI and Waymo-accounting for about $188 billion, or roughly two-thirds of the total. The scale of these deals has lifted overall funding numbers, even as activity across the broader market remains uneven.

Andreessen Horowitz, in a recent blogpost, said the quarter cannot be viewed only through the lens of mega-rounds. Even excluding the four largest deals, funding would still have totalled around $112 billion, a level it said would have been a record in most prior years. The top-tier venture capital firm also pointed to movement in the rest of the market, with early-stage funding up 41% year-on-year and seed funding rising 31% in value, although the number of seed deals declined, indicating fewer but larger bets.

Investors closer home that TOI spoke to said the divergence between global trends and India remains pronounced, particularly across stages of funding.

"Globally, we are seeing a barbell effect in fundraising, with capital concentrated at the very early stage and again at the late stage, where likely winners are attracting a large share of funding. Mid-stage companies continue to face challenges in raising growth rounds, although we expect this to improve in the second half of the year as early-stage companies mature. In India, however, we are yet to see this late-stage concentration of capital," said Sanjay Swamy, founder and managing partner at Prime Venture Partners.

"India is not yet seeing the same late-stage recovery as global markets. Early-stage activity is improving, but mid- to late-stage capital remains constrained, especially with several large global investors who were historically active in India not participating as much in the current AI-led funding cycle," said Rahul Taneja, partner at Lightspeed India.

Data from Tracxn shows that while sentiment in India is improving, the recovery remains gradual. About 74% of investors expect funding conditions to improve in 2026, while capital deployment continues to be selective, with a focus on AI.


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