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- Undercover VC | 🤖 AI Takes 70% of NA VC — Smart or Risky?
Undercover VC | 🤖 AI Takes 70% of NA VC — Smart or Risky?
Plus: Why VCs need buyer intelligence in their stack
Rafe Houston
June 26, 2025
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INDUSTRY INSIGHTS 🌐
Can Europe catch up in the AI race? Or has it already lost to the US and China? We get the view from Bloomberg’s panelists from the venture capital world: Carina Namih, partner at VC firm Plural; Laura McGinnis, Principal, Balderton; and Tommy Stadlen, co-founder and general partner at Giant Ventures. They speak to Bloomberg's Tom Mackenzie. (Source: Bloomberg)
The Norrsken Foundation of Sweden has committed $348 million to European AI startups focused on social impact, particularly in areas like climate, health, food, education, and society. This funding marks a shift in venture capital trends, emphasizing AI's potential to address societal challenges over traditional business optimization. In 2024, AI and machine learning accounted for a significant portion of US venture capital funding, showcasing the growing financial interest in this sector. However, the predominant focus remains on enterprise applications, which Norrsken seeks to counterbalance by targeting AI's untapped potential in making meaningful societal contributions.
Pre-plan venture capital marks a notable shift in investment strategies, as exemplified by Mira Murati's $2 billion funding for Thinking Machines Lab. This venture, despite its nebulous nature and absence of a clearly defined product, showcases a growing trend in Silicon Valley where investments are increasingly driven by reputation and speculative potential rather than concrete business plans. The substantial investment indicates venture capitalists’ willingness to embrace risk, prioritizing Murati's esteemed background over traditional due diligence.
This trend is underscored by an overwhelming focus on AI startups, which currently consume over 70% of venture capital in North America. This phenomenon reflects a speculative frenzy within the industry, fuelled by the promise of innovative AI capabilities. As investments in such early-stage companies grow, stakeholders may need to balance eagerness with strategic oversight to ensure sustainable growth and development in the realm of artificial intelligence.
Private equity and venture capital investments in India have experienced a steep decline, plummeting to $2.4 billion in May 2025. This represents a 68% drop compared to May 2024 figures and a 53% decline from April 2025, as detailed by the IVCA and EY report. Despite the general downturn, startup investments defied the trend, demonstrating a 21% increase, reaching $1.1 billion. Financial services emerged as the leading sector with significant investments totaling $758 million across 21 deals, followed by the real estate sector with $380 million.
The Economic Times
Venture capital investments in medtech surged to $4.1 billion in Q1 2025, with strong contributions like Neko Health's $260 million funding, reflecting a recovery trend despite unfulfilled M&A expectations.
Sharon Vosmek, CEO of Astia, highlights inherent biases in traditional venture capital (VC) investment strategies, particularly the network-driven approach that limits funding for women-led start-ups. Despite women constituting a substantial portion of graduates, only a fraction of VC funds are directed their way. Vosmek emphasizes that this reliance on established networks and subjective judgments restricts diversity in innovation, often skewed by the predominantly male, pattern-matching mentality in the industry. Astia’s “Sift” strategy circumvents these biases by employing a four-stage, data-driven process, ensuring a level investment field that produces lower failure rates compared to the industry average.
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