AI VC Trends & Dashboard For 2025
2025 will be a pivotal year, as everyone in AI knows.
I’ve compiled a set of insights for 2024 and some key patterns I’ve seen developing for 2025.
I’ve also published the key data of this piece at ChiefFinancialOfficerAI, where you can query it with an AI Assistant.
Let’s get to it.
The talk by Nvidia’s iconic CEO, Jensen Huang, at CES, only confirmed what we’re going through in terms of the subsequent phases of development in AI.
And I’m not talking just about regular people who feel the exceptional bottom-up rise of AI tools as they become available to more and more consumers.
There is also massive pressure on top executives at big tech who are rushing to become hyperscalers.
Transitioning from Big Tech to hyperscaling means a shift from major distribution control of consumer demand via the existing pipelines to, and that’s the key point, the control over the “AI computing pipelines,” which will become a key strategic asset to have in the coming decades.
And the same type of pressure to keep up to implement AI within their enterprise businesses by top executives in all the verticals who are getting potentially redefined by AI.
So much so that, as I’ve explained in the last weekly issue, we saw already the massive rise of an AI Managerial class at an enterprise level:
Just a few days back, Google’s CEO Sundar Pichai, addressing his top executives, said:
I think 2025 will be critical,
Pichai said:
I think it’s really important we internalize the urgency of this moment, and need to move faster as a company. The stakes are high.
Pichai also emphasized:
we have some work to do in 2025 to close the gap and establish a leadership position there as well.
And he closed up with:
Scaling Gemini on the consumer side will be our biggest focus next year.
At the same time, on the stage at CES, Jensen Huang has made clear we’re in the middle of a massive shift, which, rather than being over, is transitioning us from generative AI to agentic AI, to bringing us to a phase of “Physical AI.”
I’ll emphasize these points in the upcoming issues.
On the other hand, I can confirm that I get more and more questions from top executives at large enterprise companies who are trying to figure things out on the fly.
That’s the paradox of 2025. It will be a pivotal year for further consumer adoption. At the same time, the enterprise will also push on the accelerator to try to figure things out.
In the end, we’ll see three pivotal moves:
Hyperscalers are getting way more competitive, ramping up consumer and enterprise adoption.
Consumer adoption is reaching a critical mass, where an AI consumer application might be in the hands of over a billion people.
Enterprise businesses will be experimenting way more wildly within their organizations as the pressure to experiment with AI comes from the top. Thus, for the first time since the “ChatGPT moment,” operational teams will have the bandwidth to test and experiment while dealing with massive pressure from the top.
Based on the above, let’s see some key trends developing regarding key people and capital movements, shaping consumer and enterprise products in 2025.
AI Skewed Funding (winner take all effect)
In 2024, AI companies raised billions, with Databricks ($10B), xAI ($6B), Anthropic ($4B), and OpenAI ($6.6B).
Funds were directed towards infrastructure, advanced models, and industry-specific solutions like education, cybersecurity, and fintech.
At least in Generative AI, the skewness has also shown geographically.
Generative AI startups raised $56 billion globally in 2024, driven by landmark investments in Databricks, OpenAI, and xAI.
Yet, the US dominated funding.
M&A activity grew, and infrastructure investments soared, setting the stage for challenges and consolidation in 2025.
2024 was a Record Investment in Generative AI startups, which raised $56 billion globally in 2024, a 192% increase from 2023 across 885 deals.
Yet, a few Major Deals in Q4 2024 alone saw $31.1 billion in funding, including Databricks ($10B), xAI ($6B), Anthropic ($4B), and OpenAI ($6.6B).
The US Dominance is clear as most funding went there. There were some notable exceptions, which included Moonshot AI ($1B), Mistral (~$640M), and MiniMax ($600M).
Mergers and acquisitions totaled $951M, with significant “acqui-hires” by Google and Microsoft.
Infrastructure-layer companies like Crusoe ($600M) and Lambda ($320M) thrived, benefiting from AI’s growing demand for data centers.
OpenAI Leadership Moves
As 2024 was a pivotal year for AI in terms of consolidations and shifts, it’s not surprising that the major former research labs turned into major players and saw intense talent competition, with key shifts like OpenAI departures, Microsoft’s Inflection AI acquisition, and xAI’s formation.
Some of these significant moves in 2024 included Ilya Sutskever leaving OpenAI to establish Safe Superintelligence Inc., focusing on AI safety.
Jan Leike and John Schulman Join Anthropic, former OpenAI researchers, moved to focus on alignment research.
Mira Murati, former CTO at OpenAI, left to pursue independent AI explorations.
Andrej Karpathy, former Tesla and OpenAI, founded Eureka Labs, a company focused on AI-driven education.
2024 was also a year of “acqui-hires” with Microsoft Acqui-hiring Inflection AI Team. It integrated 70 engineers, including co-founders Mustafa Suleyman and Karen Simonyan.
In addition to that, it was a year of intense competition, with some major poaching.
OpenAI hired some key engineers from Google DeepMind, like Lucas Beyer, Alexander Kolesnikov, and Xiaohua Zhai, for its Zurich office.
Elon Musk also made 2024 quite interesting as it launched xAI, and he recruited top talent from Tesla, DeepMind, OpenAI, and Microsoft.
In the meantime, Greg Brockman, Co-founder and President of OpenAI, took a hiatus and returned later in the year.
Top VC Moves And Following Capital Flows
In 2024, VCs showed increased mobility, with many leaving established firms to launch specialized funds in AI, climate tech, or early-stage startups.
Boomerang moves, advisory transitions, and regional focuses, particularly in Europe, gained traction.
One of the most striking shifts in 2024 was the increased movement of senior VCs across firms.
Traditionally marked by long-term tenures, the industry has now embraced greater fluidity, with seasoned professionals like Matt Miller and Keith Rabois transitioning to new firms or launching their ventures.
2024 also saw a surge in VCs, leaving established firms to create independent funds. These specialized funds are targeting high-growth sectors such as AI, climate tech, and early-stage startups.
Firms like Axiom Partners and Type Capital exemplify this trend, addressing niche markets with tailored investment strategies (maybe showing that VC is a craft business?).
This shift suggests that VCs are increasingly drawn to the opportunity to shape their focus areas independently, without the constraints of larger, traditional organizations.
The AI boom of 2024 has significantly influenced venture capital movements.
Key figures such as Sriram Krishnan and Brian Roberts shifted roles to focus on AI, driving the launch of funds dedicated to machine learning and related technologies.
This is just a signal of the booming Generative AI spending surge.
Seed-Stage Pay
Seed-stage startup founders earn modest salaries, ranging from $132,000 for CEOs to $149,000 for Product and CPO roles. These figures reflect resource limitations as startups prioritize growth and product development. CTOs and COOs typically earn slightly more, emphasizing their operational and technical importance.
Technical roles command higher pay, particularly in the Bay Area. Senior engineers earn between $180,000 and $235,000, often surpassing founder compensation. Mid-level engineers earn $100,000 to $145,000 in the Bay Area, compared to $90,000 to $130,000 in other tech hubs. Product roles in the Bay Area also outpace other regions, with salaries between $130,000 and $185,000, highlighting the region's dominance as a global tech hub.
Equity compensation is a significant incentive for early employees. The first hire at a seed-stage startup typically receives between 0.5% and 4% equity, with a median of 1.49%. Equity allocations decrease with subsequent hires, reflecting reduced risk as the company grows.
Founder salaries increase with funding stages, reaching $218,000 by Series B, reflecting improved financial stability. Product management roles play a strategic role, driving innovation and growth, while mid-level roles in engineering, sales, and marketing—earning $100,000 to $175,000—are crucial for scaling and customer acquisition.
AI Effect in EU
Also, the EU experienced an “AI effect” in VC funding.
The European AI startup ecosystem in 2024 experienced remarkable growth, driven by increasing innovation and adoption of artificial intelligence. AI startups in Europe attracted 25% of the region’s total VC funding, amounting to $13.7 billion, a significant jump from 15% four years ago, highlighting growing confidence in AI-driven innovation.
The year saw the emergence of new unicorns like Poolside and Wayve, demonstrating breakthroughs in early-stage AI technologies and solidifying Europe’s role as a hub for cutting-edge startups. Additionally, rising stars such as Mistral AI, Photoroom, and Dottxt showcased the sector's potential for further expansion.
The collective market value of European AI startups doubled over the past four years, reaching $508 billion in 2024. AI now represents 15% of Europe’s overall tech sector value, underlining its growing significance in the region’s innovation economy.
The European AI industry employed 349,000 people in 2024, marking a 168% increase since 2020. Generative AI tools have significantly transformed workflows, with 93% of surveyed CTOs reporting notable changes.
European AI ecosystems continue to attract global interest, particularly from U.S. investors and companies seeking talent and innovation, reinforcing Europe’s position as a key player in the AI landscape.
YCombinator Trends
YC’s focus often signals emerging trends for the next decade, making it essential for VCs to identify areas of key adoption. A critical shift for YC should include leveraging AI and robotics to enhance construction and infrastructure projects, such as tools that automate processes and improve government efficiency. Similarly, innovations in crime prevention, emergency response, and community safety are becoming increasingly vital.
With the rise of domestic manufacturing, ML-based robotics can play a transformative role in revitalizing U.S. industries and reducing offshoring. A renewed focus on Stablecoins 2.0 could advance global payments and finance, while the integration of LLMs in chip design enables the creation of specialized chips like ASICs and FPGAs. AI-aided engineering tools also promise to revolutionize physical systems, including satellites, chips, and buildings.
Emerging opportunities include New Space Companies, exploring cost-effective satellite launches and space exploration. Trends such as ML in robotics for industrial and agricultural use, ML-based physical simulations, new defense technologies, and climate tech solutions for decarbonization are pivotal. Furthermore, innovations in healthcare and explainable AI are reshaping industries, emphasizing transparency and scalability for future growth.
Major Acquisitions
In 2024, AI acquisitions centered on infrastructure, generative AI, and cross-industry applications, with major deals led by Nvidia, Databricks, and AMD. Companies like Canva, ServiceNow, and Salesforce integrated AI into tools for design, enterprise, and retail, driving global competition and innovation.
Key acquisitions shaped the market. Nvidia acquired Run:ai for $700M to enhance AI infrastructure, while Databricks made notable purchases, including MosaicML ($1.4B), Tabular ($1B+), and Arcion ($100M), emphasizing data management and generative AI. Canva advanced AI-driven creativity with its acquisition of Leonardo.ai, integrating image generation tools. SoundHound expanded in voice AI with Amelia AI, and Salesforce bolstered its portfolio with PredictSpring and Tenyx for retail and conversational AI.
The industry also saw breakthroughs in Zero Data AI Cloud, as Uniphore acquired ActionIQ and Infoworks to redefine enterprise data management. AMD’s $4.9B acquisition of ZT Systems marked a significant challenge to Nvidia in AI infrastructure. ServiceNow targeted industry-specific AI with acquisitions like Raytion GmbH for knowledge management.
Patterns included multi-billion-dollar deals, cross-industry integration, and the dominance of generative AI, with a focus on improving data governance, collaborative tools, and productivity. These moves underscored fierce global competition for AI leadership.
Recap: In This Issue!
Transition to Hyperscalers: Big Tech companies are shifting focus from consumer demand pipelines to controlling AI computing pipelines, positioning them as strategic assets for the coming decades.
Enterprise AI Experimentation: Top executives across industries are accelerating AI adoption, with operational teams increasingly testing and implementing AI solutions under mounting pressure.
AI Managerial Class: The rise of AI-focused managerial roles within enterprises is reshaping corporate structures, driven by the urgency to integrate AI into core operations.
Generative to Agentic AI: 2025 marks a shift from generative AI to agentic AI, transitioning into the "Physical AI" phase, as highlighted by Nvidia's Jensen Huang.
Record AI Funding: 2024 saw $56 billion in funding for generative AI startups, with significant contributions from Databricks ($10B), OpenAI ($6.6B), and xAI ($6B). The U.S. dominated the funding landscape.
AI Acquisitions: Major deals like Nvidia acquiring Run:ai ($700M) and AMD acquiring ZT Systems ($4.9B) emphasized infrastructure, generative AI, and cross-industry applications.
YC Trends: Y Combinator startups are leveraging AI in government software, public safety, manufacturing, fintech, chip design, and space, signaling emerging trends for the next decade.
VC Shifts: Increased mobility among VCs and the rise of specialized funds targeting AI and climate tech are reshaping the investment ecosystem.
European AI Boom: European AI startups secured $13.7 billion in funding, doubling their market value to $508 billion over four years, reflecting global investor interest.
AI Consumer Adoption: Consumer AI applications are nearing critical mass, with projections of over a billion users by 2025.
Enterprise AI Adoption: Enterprises are intensifying AI experimentation, aiming to redefine workflows and achieve scalability under competitive pressures.
I’ve also published the key data of this piece at ChiefFinancialOfficerAI, where you can query it with an AI Assistant.
With massive ♥️ Gennaro Cuofano, The Business Engineer
