Data shows most AI venture funding is still flowing to Silicon Valley

In short: Recent funding data suggests venture capital money is concentrating in US AI startups, not spreading to cheaper locations outside Silicon Valley.

What's going on

A common claim is that venture capital firms get more for their money outside Silicon Valley, because costs like salaries and office space can be lower elsewhere. But early 2026 funding numbers point in the opposite direction, with investors putting most of their biggest checks into US AI companies, many based in San Francisco and Silicon Valley.

In February 2026, global venture capital funding hit a record $189 billion. US companies took $174 billion of that total, or about 92%. AI startups alone raised about $171 billion in the same month, roughly 90% of all global venture funding.

The biggest rounds were also heavily US-focused. OpenAI reportedly raised $110 billion at an $840 billion valuation (valuation is the price tag investors place on a company). Anthropic raised $30 billion at a $380 billion valuation, and Waymo raised $16 billion. Together, those three deals added up to $156 billion, or about 83% of all venture funding that month.

Other signs show the same pattern. In the first two months of 2026, 17 US AI startups raised rounds of $100 million or more. Early-stage funding also rose 47% year over year to $13.1 billion in February. Still, much of the money went into a small number of very large deals, like a few giant whales in a pond.

What to watch

This concentration could continue if investors keep prioritizing scale in US AI companies over lower-cost locations abroad. It also raises a question: if so much money depends on a few mega-deals, the pace could slow quickly if investor confidence changes.

Source: Financial Times