Global venture capital (VC) investment in generative artificial intelligence (GenAI) shot up to $49.2bn (€42.5bn) in the first half of 2025, more than the $44.2bn total for all of 2024 and already double the 2023 full-year tally.
However, analysis from global professional services giant EY shows the increasingly large sums are flowing to an ever-more concentrated pool of GenAI businesses, overwhelmingly in the US.
EY Ireland’s latest “Generative AI Key Deals and Market Insights” study highlights how the sharp rise in overall deal value comes despite a near 25pc drop in the number of transactions in the first six months of 2025.
In addition, early-stage VC funding rounds declined, and angel and seed rounds saw no change. That all points to a pattern of fewer but significantly larger deals hoovering up capital.
The US accounted for 97pc of global deal value and 62pc of transactions. The Europe, Middle East and Africa (Emea) regions accounts for 23pc of volume but just 2pc of deal value.
Of 39 global AI unicorns – private companies valued at more than $1bn – 29 are in the US, but just three are in Europe, EY said.
US dominance in GenAI innovation and investment is widening
EY Ireland’s technology, media and telecoms lead, Grit Young, said GenAI is reshaping the investment landscape at an extraordinary pace – including a risk of squeezing out funding for small and mid-tier start-ups.
“Many high-potential start-ups find themselves in a difficult middle ground, too advanced for early-stage support, yet not quite large enough to attract global VC attention,” she said.
Ireland has emerged as a strong adopter of AI, but many AI start-ups are struggling with access to capital and infrastructure. In Ireland, the funding environment for AI start-ups remains challenging, particularly in the €1m to €10m funding space, Ms Young added.
Meanwhile, a relative handful of global-scale investments dominate the sector. Those have included SoftBank’s potentially $40bn commitment to OpenAI, xAI’s $10bn funding round, and major investments in Databricks ($5bn), Anthropic ($3.5bn), French start-up Mistral AI ($600m), and legal tech giant Harvey ($600m).
EY’s Ms Young said the pattern is clear. “US dominance in GenAI innovation and investment is widening, with deal activity increasingly concentrated in North America,” she added.
“With increased regulatory divergence on AI between the US, Europe, China and beyond, it will be important for Europe to balance essential regulation with supporting and enabling innovation.”?
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