Global GenAI VC Investment Reaches Record $87 Billion in 2025 as Sovereign Wealth Funds Drive Strategic Growth - EY

• GenAI VC funding up 65% year-on-year to $87 billion - 350% above 2023 levels
• Sovereign wealth funds emerge as major players, investing $46 billion in AI ventures
• Deal volumes down 35% year-on-year as investment moves to late stage, more mature companies
• North America is the destination of 97% of total VC investment
• Continued early-stage investment opportunities for Irish companies

Venture Capital (VC) investment in generative artificial intelligence continues to surge globally, with total funding reaching a record $87 billion in the first 11 months of the year, with a smaller number of larger late-stage deals driven by Sovereign Wealth Funds pointing to a rapidly maturing market. That’s according to the latest EY Ireland Generative AI Key Deals and Market Insights study, which analyses Venture Capital investment funding trends and opportunities in the rapidly evolving sector

Total investment for the first 11 months of 2025 has reached $87 billion, up 65% year-on-year on the $52.5billion recorded in 2024 and 350% above 2023 levels ($24.7 billion).  In contrast, total deal volume has contracted significantly in 2025, down 35% year-on-year as investment increasingly moves to larger late-stage deals into more mature companies. This signals a preference amongst investors to concentrate on fewer, larger deals involving more mature companies with proven revenue models and enterprise adoption, rather than spreading capital across numerous early-stage ventures.

Sovereign Wealth Funds have emerged as a key investor in 2025, responsible for $46 billion worth of AI venture transactions to date. This investment is up significantly on 2024 and is driven by a range of factors, including the desire for economic diversification, long-term returns and the drive to ensure national technological self-sufficiency, what is termed Sovereign AI.

While the geographic source of investment in 2025 is increasingly changing with the growing importance of Sovereign Wealth Funds, its destination however, remains unchanged. Having accounted for 91% of deal value and 63% of deal count in 2024, North America is now responsible for 97% by value and 60% by volume. This level of dominance is extraordinary by any standard, pointing towards the rapid growth and geographic concentration in a sector that attracted just $3.3 billion globally in investment in 2020.               

A wave of high-value investment into some of the most established players has underpinned this historic year to date, including the record SoftBank Group-led $40 billion investment in OpenAI in March, Mistral AI’s $2 billion Series C round that valued the company at $12 billion, Databricks Series K $1 billion investment round at a $100 billion valuation, and Anthropic’s $13 billion round which valued the company at more than $180 billion.

Grit Young, EY Ireland Partner and Technology, Media and Telecoms Lead said: “There has been a clear pivot in VC behaviour in 2025 toward strategic, high-value GenAI investments, reflecting confidence in platforms with proven enterprise adoption and automation-driven efficiency. We are witnessing a decisive shift in VC behaviour, concentrating capital into fewer, high-value GenAI deals while demanding clear, early paths to profitability.

In a sector that just five years ago was attracting little more than $3 billion in investment globally, this represents a remarkable level of maturation. In contrast to previous rapidly growing investment classes, investor focus is not on experimentation but instead on proven platforms, signalling a new era where scale and strategic clarity will define success.”

The dawn of Sovereign AI

Nations around the world have rapidly recognised the role AI is already playing in economic self-sufficiency, innovation and national security. Governments are increasingly deploying Sovereign Wealth Funds to advance AI for purposes including defence and healthcare, with $46 billion worth of GenAI investment to date in 2025.

From an economic lens, Sovereign Wealth Funds are being utilised to secure access to compute power, data resources, and advanced AI models, with the aim to create Sovereign AI ecosystems that will underpin future growth. This wave of investment is also fuelling programmes for data centres, semiconductor supply chains, and AI research hubs, particularly in regions such as North America and the Middle East, where countries are positioning themselves as the next generation of global technology hubs.

Simon MacAllister, Partner and Co-Head of Geopolitical Strategy at EY Ireland, says: “AI is now viewed as critical for both economic resilience and national security, and countries are racing to secure compute, data and models, creating unprecedented demand across the AI value chain. This rapidly emerging trend towards Sovereign AI represents a potentially fundamental shift, as companies, sovereign wealth funds and countries respond to significant geopolitical upheaval of 2025 to ensure their nation – or region – will be able to control its own AI destiny in the years ahead. This unprecedented AI investment, in everything from data centres to frontier models - also positions these locations to lead one of the largest technology cycles in history.”

Anchoring Ireland’s AI Leadership

Ireland is well positioned amongst its European neighbours to be a leader in AI. With 16 of the world’s top 20 tech multinationals based in the country, Ireland can play a pivotal role in driving AI integration across industries such as life sciences, financial services, sports tech, manufacturing and legal services. This advantage is further strengthened by Ireland’s status as the only native English-speaking, common-law jurisdiction within the EU, making it an ideal bridge for US AI companies seeking a European base.

Ireland is not solely dependent on FDI for AI investment, with the Ireland Strategic Investment Fund (ISIF) playing an increasingly active role in the sector, including committing €75 million to the Cordiant Digital Infrastructure Equity Fund, and partnering with Elkstone to anchor an early-stage venture capital fund valued at €100 million. Moreover, with Ireland’s upcoming presidency of the European Union in the second half of next year, there is a unique opportunity to advance this leadership by shaping policy and championing innovation across the Union. The EU has already launched major initiatives such as the AI Continent Action Plan and Apply AI Strategy to boost compute capacity, innovation funding and skills development. 

Fig 1. GenAI VC Investments, 2018 – Nov 25 by Volume (Deal Count) and Total Value ($billion)

ENDS

Methodology

In conducting this research, EY utilised a rigorous methodology to ensure accuracy and reliability. Building on previous reports and utilising reputable financial research platforms such as Pitchbook and S&P Capital IQ, EY gathered comprehensive data on investment trends, market dynamics, and emerging technologies within the AI sector. The GenAI companies have been considered and classified as per the Pitchbook report “AI Public Comp Sheet and Valuation Guide" for Q3'2025.

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