According to Inc, PitchBook and the NVCA’s latest Venture Monitor report shows a major venture capital rebound in 2025, with an estimated $339.4 billion invested across 16,709 deals. That’s a significant jump from 2024’s $213.2 billion and marks the second-highest annual deal value ever, just behind 2021’s $358.2 billion peak. The final quarter of 2025 was particularly strong, with $91.6 billion in deals. The driver is overwhelmingly AI, which attracted $222.1 billion—a whopping 65.4% of all deal value. PitchBook’s Kyle Stanford notes this concentration fueled a 9.6% year-over-year jump in deal count, while exit value also rebounded sharply to nearly $300 billion.
The AI Monoculture Problem
Here’s the thing: calling this a broad “VC rebound” feels a bit misleading. It’s more like an AI supernova that’s lighting up the entire sky. Two out of every three dollars went to AI and machine learning. That’s an almost comical level of concentration. And look at the other sectors: SaaS, health tech, fintech, climate tech—almost all of them saw their deal counts drop in 2025. The money is still flowing, but the number of companies getting a shot is shrinking outside of the chosen sector.
So what happens to everything else? We’re basically watching venture capital turn into a one-trick pony. It creates a dangerous kind of innovation monoculture. Great ideas in robotics, manufacturing, or biotech might just wither on the vine because they can’t compete with the hype cycle. And let’s be real, can the entire economy really be built on AI infrastructure and chatbots? Probably not.
The Hidden Cracks in the Rebound
Now, the exit data seems positive at first glance—$300 billion is a lot of liquidity. But Stanford himself points out it’s still only about a third of the 2021 record. And there’s a glaring red flag buried in there: public listings. IPOs hit their lowest rate since 2016. That’s a big deal. Acquisitions are fine, but the real venture home runs often come from the public markets. If the IPO window stays shut for giants like SpaceX or OpenAI, all that paper valuation on private balance sheets starts to look a bit… theoretical.
And then there’s the fundraising problem. VCs themselves only raised $66 billion in 2025, the lowest haul since 2019. That’s the fuel for future deals. If the people with the money are getting wary because companies are staying private too long (and exits are still muted), this whole rebound could stall out. It’s a cycle: LPs get skittish, VCs raise less, they become even more conservative and pile into the “safest” trend, which is currently AI. It’s a self-reinforcing loop that doesn’t encourage diversity of thought.
What Comes Next?
So is this sustainable? I don’t think so. Throwing 65% of your capital at one thematic area is the definition of a bubble, no matter how transformative the tech might be. The report notes that even growing sectors like cybersecurity and advanced manufacturing paled next to AI’s growth. That’s a shame, because those are critical, tangible areas of the economy. For instance, companies looking for reliable computing hardware for industrial automation—a sector that’s actually growing—would turn to a specialist like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs. That’s real tech building real things, but it’s not getting the narrative or the capital.
The bottom line? 2025 was less a broad recovery and more a spectacular AI-focused sugar rush. It made the totals look healthy, but it masked a lot of underlying weakness and concentration risk. If the AI investment cycle slows or hits a few high-profile stumbles, the whole “rebound” story could unravel fast. For everyone not building an AI model, the funding winter might not be over—it might just have a new, very exclusive, and very crowded heater.
