AI driving record venture capital
Silicon Valley's AI boom is fueling record VC funding, with investors focusing on AI infrastructure for various sectors.
AI's dominance in VC funding is clear, with some reports indicating that it absorbed 93% of all VC investments in Silicon Valley in 2025. This signifies a major shift in how venture capital is being allocated. Much of this investment is focused on "Physical AI," which combines AI with physical systems for real-world applications like robotics and automation. In the first three quarters of 2025 alone, Physical AI scaleups raised $16.1 billion. The AI infrastructure market, including data centers and computing hardware, is rapidly expanding. Global spending on AI data centers is projected to exceed $1.4 trillion by 2027. Hyperscalers are expected to invest $700 billion in AI infrastructure in 2026, benefitting semiconductor companies, especially those linked to AI technologies. Nvidia's GPU sales reflect the strong demand in this area.
