Despite Political Challenges, North America Dominates AI Venture Capital Investments
As the political landscape around artificial intelligence (AI) becomes increasingly intricate, North America continues to dominate the landscape of AI venture capital (VC) funding. Recent insights from PitchBook reveal that from February to May this year alone, venture capitalists infused a staggering $69.7 billion into AI and machine learning startups based in North America, distributed over 1,528 deals. This amount far exceeds the $6.4 billion allocated to European AI startups, which saw funding over 742 deals during the same timeframe.
In contrast, Asia’s AI startups have faced greater challenges, attracting only $3 billion through 515 deals within the same period, according to PitchBook. The underwhelmed VC activity in Asia can be linked to several local economic factors and global competition, highlighting difficulties in scaling AI innovations in these markets.
Despite recent efforts by the U.S. government, including significant funding cuts under the Trump administration that affected scientific grants and made it increasingly challenging for international students to pursue AI studies in the U.S., North America remains the epicenter for AI innovation. This trend seems paradoxical, given the tough environment for AI R&D funding, with trade policies and tariff ramifications further complicating the investment landscape.
Renowned AI pioneer Geoffrey Hinton has vocally criticized high-profile figures, including Elon Musk, for perceived adverse impacts on scientific institutions. As figures in the tech community push for a less hostile atmosphere for AI development, one would expect Europe, which has pledged extensive investment to bolster its AI capabilities, to lure substantial venture capital away from the U.S. However, that shift has yet to materialize.
While Europe champions a commitment to becoming a leader in AI—showcasing successful startups such as Mistral, H, and Aleph Alpha—the anticipated influx of VC capital has not occurred. Investors seem unconvinced to steer their funds away from North America, which still accounts for a remarkable 75.6% of all AI VC funding in 2024, totaling about $106.24 billion. Notably, this share has surged to 86.2% ($79.74 billion) in 2025, reflecting a strong commitment to U.S.-based innovations among investors.
The ongoing shift in investment trends shines a light on a unique dynamic. Despite regulatory challenges and political unpredictability, North America’s allure as a hub for AI innovation remains potent, suggesting that despite any external factors, the drive for supporting pioneering AI solutions continues unabated. Investors are, perhaps, banking on the U.S. to deliver the highest returns in the tech sector, establishing it firmly as the go-to region for cutting-edge AI advancements, at least for the foreseeable future.