The venture capital market is splitting along sharp lines as money pours into a small group of leading artificial intelligence startups, according to Bloomberg, in a trend that is making life harder for smaller funds. The report says investor enthusiasm for AI has distorted the broader venture market, with just five companies — OpenAI, Anthropic, xAI, Waymo and Nscale — accounting for 78% of all venture deal value in the first quarter of this year. Capital has largely flowed to top investors that backed AI early, including Founders Fund and Andreessen Horowitz, while smaller and newer managers have struggled to compete.
The divide is also showing up clearly in fundraising data. Last year, newly established management firms running three funds or fewer raised about $62 billion, down roughly 60% from the $163.4 billion raised during the 2022 pandemic-era peak. Even experienced managers brought in only $84 billion last year, equal to just one-third of their 2022 total. Bloomberg also said many limited partners are facing liquidity pressure and are prioritizing returns from existing investments over making new commitments.
ChainCatcher, citing Bloomberg, reported that the venture capital market is going through a pronounced structural split. As capital concentrates around top artificial intelligence startups, many small and mid-sized venture funds are being squeezed by fundraising difficulties, weaker performance and narrower exit options.
AI deals are taking the bulk of venture money
Bloomberg said heavy investor enthusiasm for artificial intelligence has distorted capital allocation across the venture market. Data in the report showed that just five companies — OpenAI, Anthropic, xAI, Waymo and Nscale — accounted for 78% of total venture deal value in the first quarter of this year.
Much of that money has gone to a small circle of investors that made early AI bets, including Founders Fund and Andreessen Horowitz. Smaller emerging fund managers, by contrast, have found it difficult to compete with those larger firms.
The fundraising gap is widening
The split is also visible in fundraising figures. Last year, newly formed management firms, defined in the report as those running three funds or fewer, raised only about $62 billion. That was down roughly 60% from the $163.4 billion recorded at the pandemic-era peak in 2022.
Even experienced managers saw weaker fundraising. They brought in just $84 billion last year, or one-third of the 2022 figure. Bloomberg added that many limited partners are under liquidity pressure and are more inclined to demand returns from existing investments rather than commit fresh capital.
This article was originally published by Bit.Fan. For more cryptocurrency news and market insights, visit www.bit.fan. Disclaimer:
The market information, project data, and third-party content displayed on this platform are for industry information sharing only and do not constitute any form of investment advice or return commitment.
Cryptocurrency trading carries high risks. Users should fully assess their risk tolerance and make independent decisions. All profits, losses, and legal responsibilities are borne by the users themselves.
