North America Dominates AI Venture Capital Despite Challenges

Despite an environment some experts describe as increasingly hostile to AI research and development, North America continues to dominate global AI venture capital funding. Data from investment tracker PitchBook reveals that between February and May 2025, venture capitalists invested a staggering $69.7 billion in North America-based AI and machine learning startups across 1,528 deals. This investment volume far exceeds that of Europe and Asia during the same period.

In comparison, European AI ventures attracted $6.4 billion across 742 deals, while Asian startups received only $3 billion across 515 deals. This disparity is notable given Europe's ambitious commitments to become a global AI leader, including hundreds of billions of euros pledged to AI development and a growing roster of successful startups such as Mistral, H, and Aleph Alpha.

One might expect that political and regulatory challenges in the U.S., including significant cuts to federal AI research funding, stricter immigration policies affecting foreign AI students, and trade tensions causing market uncertainty, would drive venture capital away from North America. However, the data tells a different story. North American AI startups secured 75.6% of all VC AI funding in 2024, amounting to $106.24 billion, and this share has increased to 86.2% ($79.74 billion) so far in 2025.

This dominance suggests that investors remain confident in the innovation potential of North American AI ventures despite the unpredictable political landscape. Meanwhile, Asian markets, including China with notable startups like DeepSeek and Butterfly Effect, face additional challenges such as export controls limiting access to critical AI chips, which likely dampens venture capital activity.

The ongoing concentration of AI funding in North America underscores the region's pivotal role as the global hub for AI innovation and investment. For founders, investors, and policymakers, understanding these dynamics is crucial to navigating the evolving AI landscape and capitalizing on emerging opportunities.

Why North America Remains the AI Investment Powerhouse

Several factors contribute to North America's sustained lead in AI venture capital:

• Robust innovation ecosystems with world-class universities and research institutions.
• A mature venture capital market willing to invest heavily in cutting-edge AI startups.
• A large pool of experienced AI entrepreneurs and technical talent.
• Despite regulatory challenges, the U.S. market offers unparalleled scale and access to global customers.

While Europe and Asia continue to develop their AI sectors, their venture capital ecosystems have yet to match North America's scale and momentum. Export controls and geopolitical tensions further complicate investment flows in Asia, particularly in China.

In summary, the global AI investment landscape remains heavily skewed toward North America. Despite political, regulatory, and market challenges, investors continue to place their bets on U.S.-based AI innovation as the most promising avenue for returns and breakthroughs.