VC funding flows mostly to AI startups, but AI is not replacing VCs

In short: Venture capital firms are putting most of their money into AI startups, even though there is little sign that AI is changing how venture capital itself works.

What's going on

Venture capital, or VC (money that investors put into young companies), is increasingly centered on artificial intelligence. In February 2026, startups raised about $189 billion globally, and AI startups captured roughly $171 billion of that total, about 90%.

This follows a strong 2025. AI made up about 53% of global VC dollars that year, and U.S. private AI investment from 2012 to 2024 passed $500 billion. The biggest checks are getting even bigger. In the first two months of 2026, 17 U.S. AI startups raised more than $100 million each.

A few giant deals are driving much of the activity. Reported examples include funding for OpenAI, Anthropic, and Waymo. Some early stage rounds, meaning very young companies raising their first major money, have also climbed above $100 million. That is like giving a startup a full stadium budget before it has sold many tickets.

What to watch

So far, the available 2026 data does not show AI tools directly replacing core VC work like finding deals or checking companies before investing. Instead, the bigger near term risk looks financial. More money is concentrating in a small number of winners, which could make it harder for smaller startups to get funded and could hurt returns if a few large bets do not pay off.

Source: Wired