Artificial intelligence (AI) continues to outpace cryptocurrency in venture capital (VC) funding, with AI startups securing nearly $20 billion in the first quarter of 2025—far surpassing the $861 million raised by crypto firms. Despite the late-2024 “Trump bump” in crypto, investors are overwhelmingly favoring AI.

Key Insights:

• AI startups closed 795 deals from January to March, led by Databricks’ $15.3 billion round and Anthropic’s $2 billion raise.

• The largest crypto investment was Abu Dhabi’s MGX injecting $2 billion into Binance.

• AI VC funding has historically exceeded crypto, with AI investment growing from $670 million in 2011 to $36 billion in 2020.

The Numbers Tell the Story

Data from PitchBook reveals that AI continues to dominate, with major funding rounds driving the sector’s momentum. Meanwhile, crypto’s biggest institutional investment—a $2 billion stake in Binance by Abu Dhabi’s MGX—still pales in comparison to AI’s largest deals. Other notable crypto raises included Mesh ($82 million), Bitwise ($70 million), and digital asset bank Sygnum ($58 million).

In 2024, AI startups accounted for one-third of all global VC investment, totaling $131.5 billion across 4,318 deals. In contrast, crypto firms raised $4.9 billion across just 706 deals, further highlighting AI’s commanding lead.

Does AI’s VC Lead Matter?

With AI startups making headlines and OpenAI’s Sam Altman reportedly seeking trillions in investment, the perception of an investor preference for AI over crypto is growing. However, historical data suggests this isn’t a sudden shift—VCs have long favored AI and machine learning, with consistent funding growth over the past decade.

Crypto has only surpassed AI funding once, in 2021, when a narrower definition of AI investment momentarily put blockchain ahead. Yet AI quickly reclaimed its lead, surpassing $100 billion in VC funding by 2024.

Beyond Traditional Venture Capital

Unlike AI, crypto projects often benefit from alternative funding mechanisms, such as airdrops. A Dragonfly report found that the 11 largest airdrops between 2020 and 2024 generated $7 billion—providing projects with fresh capital that doesn’t come from traditional VC routes. While this won’t close the funding gap between AI and crypto, it underscores the unique financial dynamics of the crypto space.

Ultimately, while AI currently dominates VC funding, crypto continues to innovate and attract investment through alternative means. The real question isn’t whether one sector is replacing the other—it’s how both will evolve and coexist in the rapidly changing tech landscape.