VCs Pour Record $189B into Startups
Global venture funding hit an all-time high of $189 billion in February, fueled by massive AI deals. The surge shows a major divergence between private market enthusiasm for AI and the more cautious sentiment for publicly traded software stocks.
The February funding surge was dominated by a few colossal deals, with AI-related startups attracting an astounding 90% of all capital invested. Just three companies—OpenAI, Anthropic, and Waymo—accounted for 83% of the total, pulling in a combined $156 billion. This intense concentration of capital highlights a "winner-takes-most" dynamic in the race for AI infrastructure dominance, leaving non-AI startups in a comparatively dry funding environment. OpenAI's staggering $110 billion funding round, the largest ever for a private venture-backed company, brought its valuation to $840 billion. This mega-round saw participation from strategic corporate investors including a $50 billion commitment from Amazon and $30 billion each from SoftBank and Nvidia. The deal with Nvidia is part of a larger strategic partnership to secure next-generation computing power for OpenAI's model training and inference needs. Anthropic, a key rival to OpenAI, also secured a massive $30 billion funding round, catapulting its valuation to $380 billion. This Series G round was led by Singapore's sovereign wealth fund GIC and hedge fund Coatue. The significant investment from over thirty participants signals widespread institutional confidence in the company's enterprise-focused AI models, like Claude Code, which has seen its revenue run-rate double since the start of 2026. This flood of private investment into AI stands in stark contrast to the public markets, where software companies have seen stock values tumble. The Nasdaq Composite, a tech and software-heavy index, was down 3.4% in February, reflecting investor anxiety that AI could disrupt existing enterprise software business models. This divergence underscores a market recalibration, with capital flowing from established public software giants to the private startups building foundational AI. While the largest deals were centered in the Bay Area, the Los Angeles venture scene remains a major hub for AI investment, particularly in applied AI for sectors like media, entertainment, and healthcare. LA-based firms like Upfront Ventures, Greycroft, and March Capital are actively funding AI startups. Recently, LA-based Procode AI, a platform for medical billing, raised $4 million in a round led by Story Ventures to expand its AI-powered services.
