Venture boom 2025 — why investors are betting on AI

The first quarter of 2025 was a real breakthrough for the venture capital market, setting a new record for investment volume at USD 126.3 billion, the highest in 11 quarters, with AI being the main catalyst for this boom. At the same time, the number of deals fell to 7,551, the lowest level in recent years, demonstrating investor caution in all sectors except AI.

According to the KPMG Venture Pulse report, AI has become the undisputed leader of the venture capital market. The most high-profile example is OpenAI's historic funding round, which raised USD 40 billion. This deal not only set a new standard for AI startups but also highlighted the global demand for AI technologies.

In addition to OpenAI, significant investments were received by:

• Anthropic — USD 4.5 billion for the development of safe AI;
• Infinite Reality — USD 3 billion for virtual reality projects;
• Binance — USD 2 billion for the integration of AI into financial technologies.

These deals show that investors are willing to invest huge sums in companies that demonstrate potential in the field of AI, even amidst the general market caution.

Regional distribution: The United States dominates, Asia lags behind

The geography of venture capital investment in 2025 highlights a clear balance of power:

• The United States remains the global leader, accumulating 72% of global venture capital investments (USD 91.5 billion). It is the highest figure since 2021, which is explained by the concentration of AI startups and a strong venture capital infrastructure.
• Europe demonstrates resilience, attracting USD 18 billion despite geopolitical challenges, including instability due to wars and trade barriers.
• Asia is experiencing a decline: only USD 12.9 billion, which is the lowest figure for the last decade. This is due to economic challenges and less activity in the AI sector.

Such a distribution highlights that AI innovations are concentrated mainly in the United States, while other regions are trying to catch up.

Ukrainian context: challenges and opportunities

Ukraine's venture capital market remains under pressure due to the war, but the potential of Ukrainian start-ups is still attracting attention. According to Oleh Nepliakh, the Partner, the Head of Advisory Services, and the Head of Corporate Finance, Ukrainian companies have unique opportunities in several sectors.

"Despite the high risks, Ukrainian start-ups can become valuable players in defence, cybersecurity, healthcare, and logistics," he notes.

The expert also emphasises the need for a systematic approach to unlock this potential.

"To implement this potential, Ukraine needs a clear strategy for AI development, an active role of the state in stimulating investment, and support from international partners in building a venture capital infrastructure, as the demand for Ukrainian talent and technology remains high despite the war," Segeda emphasizes.

Experts believe that Ukrainian start-ups in defence technology and cybersecurity can receive significant investment if favorable conditions for investors are created.

What lies ahead

The analysts predict that in the second quarter of 2025, the venture capital market will remain restrained outside of AI. Geopolitical risks, uncertainty in the IPO market, and trade barriers are making investors cautious. Nevertheless, AI will continue to dominate, particularly in the following areas:

• Industrial solutions: automation of production and logistics;
• Defence technologies: AI for drones and security systems;
• Cybersecurity: data protection in the digital economy.

In addition, mergers and acquisitions (M&A) activity is expected to increase. Large tech companies such as Google, Microsoft, or Amazon are looking to acquire AI startups to strengthen their positions in the face of a new round of global competition.

It is also predicted that investors will hunt for niche startups in the Defence Technology Sector. And talent competition will intensify, so countries with developed engineering potential will have a chance.

For Ukraine, it could become a historic window of opportunity if the government, business, and international partners can synchronise their efforts, experts add.

Earlier, we told you that Microsoft is actively integrating generative AI tools into its development process. It has led to a significant increase in the automation of code creation. Currently, 20% to 30% of all software code in the company's internal repositories is generated by AI.

We also wrote that researchers from the University of Zurich were quietly posting comments generated by AI on Reddit. The platform's moderation, which revealed the experiment, called it a "psychological manipulation" of 3.8 million subreddit participants.