In 2025, scaleup investments in Silicon Valley reached $111 billion, with AI alone absorbing $103.5 billion. Put simply, “Silicon Valley VC investments” now essentially means “AI investments.” For every VC dollar poured into technology, 93 cents flow into AI. AI is gorging venture capital. Whether this cycle proves to be another bubble or a durable global trend remains to be seen. What is certain, however, is that Silicon Valley has gone all in on AI, a bet that will either remake the future or break it.

Generative AI has been the first clear winner of this cycle.
After 2023’s landmark deals – OpenAI’s $10B raise led by Microsoft, Anthropic’s $4B from Amazon, and Inflection AI’s $1.3B round backed by Microsoft and NVIDIA – the financing landscape fundamentally shifted. Capital consolidated around a handful of foundational model players, and by 2025 Generative AI had absorbed $80B in funding, driven by OpenAI’s $40B and Anthropic’s $13B gargantuan rounds.
That next wave is already forming.

In 2025, Physical AI is emerging as the new frontier.
In just the first three quarters, scaleups in this domain raised $16B+, led by Meta’s large-scale investment in Scale AI. Other landmark deals – such as Figure AI’s $675M round to advance humanoid robotics and Neuralink’s $650M raise to accelerate brain–computer interfaces – highlight the sector’s capital intensity and revolutionary ambition.
If momentum holds, Silicon Valley could be on the verge of a second transformative cycle: from thinking machines (Generative AI) to acting machines (Physical AI).

This report – produced in partnership with Crunchbase – dives into these dynamics, mapping the Bay Area’s AI investment landscape and offering insights into where the next waves of innovation are likely to break.

For further analysis of Silicon Valley’s ecosystem pillars – from corporate innovation outposts to investors and partners – see our dedicated Mind the Bridge reports and directories.