AI Startup Funding Is Growing Fast—Especially at the Late Stage
AI startups in the U.S. are attracting major investment across all stages, with the largest share going to late-stage companies.
AI Startups Attract More Late-Stage Funding
Artificial intelligence (AI) startups in the U.S. are pulling in a large portion of venture capital funding across all stages. But the biggest share of investment is now going to companies at the late-stage level.
Data shows that over the past year, nearly half of all venture funding went to businesses in the AI sector. Among those, 61% of the funding went to late-stage AI startups. In comparison, early-stage AI companies received 30%, while seed-stage startups got 38% of AI-related investments.
What the Numbers Represent
The data used in this analysis includes only funding rounds labeled by stage—from Series A through Series J. It excludes deals categorized as corporate investments or rounds with no specific stage disclosed. For example, the recent $40 billion funding of OpenAI backed by SoftBank was not part of the count.
Even without those outliers, the totals reflect several massive AI investments, such as:
- Databricks: $10 billion (Series J, December)
- xAI: $6 billion (November)
- Anthropic: $3.5 billion (March)
Advertisement
Multiplier | The World's Leading Global Human Platform
Multiplier is a leading global employment platform that manages employment, payroll & compliance for International Teams. Multiplier makes it easy to hire, onboard, manage, and pay employees and contractors around the world. We offer end-to-end global employee management – All in one place!
Why Late-Stage AI Funding Is Surging
A higher share of late-stage funding usually signals that a sector is becoming more mature. We’ve seen this pattern before in areas like autonomous vehicles and fintech, where early excitement led to long-term funding growth.
But for AI, the story is a bit different. The high costs of developing and scaling cutting-edge platforms mean even newer AI startups may need large sums early on. Generative AI, in particular, requires massive computing power and infrastructure, driving up funding needs.
Despite the focus on late-stage investment, early-stage and seed investors remain excited about AI. They’re especially interested in emerging areas like agentic AI and AI-driven healthcare. Many believe these fields have room for strong growth and innovation.
Leaner AI Startups at Early Stage?
The smaller share of AI funding at the seed and early stages may actually be a positive sign. It could mean that new AI startups are managing to launch with less capital. If true, this efficiency could help them grow more sustainably before needing larger rounds of funding.
Whether this trend continues remains to be seen. But one thing is clear: AI remains a top priority for investors, with significant funding flowing into both new startups and mature leaders in the field.