AI Continues to Outpace Crypto in VC Funding—But Is It a Real Competition?

Despite the late-2024 surge in crypto markets, largely fueled by the “Trump bump,” venture capitalists still heavily favor artificial intelligence over blockchain startups. But does this disparity signal a shift in investor sentiment, or is it just a reflection of AI’s rapid rise?

According to Pitchbook data, U.S. crypto startups secured approximately $861 million in venture capital during Q1 2025. However, this figure was dwarfed by the $20 billion that flowed into AI-focused companies in the same period.

Between January and March, AI firms closed 795 funding deals, including Databricks’ staggering $15.3 billion round and Anthropic’s $2 billion raise. Crypto’s biggest deal by comparison was Abu Dhabi’s MGX investing $2 billion in Binance, marking the exchange’s first institutional placement. Other notable crypto deals included Mesh’s $82 million raise, Bitwise’s $70 million funding, and Sygnum Bank’s $58 million round.

AI vs. Crypto: A Funding Gap That’s Nothing New

While AI’s dominance in VC funding may seem more pronounced in 2025, it isn’t a new trend. In 2024, one-third of all venture capital funding went to AI startups, totaling $131.5 billion globally, while crypto secured just $4.9 billion across 706 deals.

Historically, AI has maintained a steady lead in attracting VC investment. Statista data shows AI funding rising from $670 million in 2011 to $36 billion in 2020. Crypto’s only year of dominance was 2021, when blockchain startups raised $30 billion, surpassing AI’s $22.3 billion in funding, according to ABI Research.

The Crypto Playbook: Funding Without VCs

While AI relies on traditional venture funding, crypto’s financial model is fundamentally different. Token launches, airdrops, and decentralized funding mechanisms often provide capital outside of the traditional VC route.

A recent Dragonfly report highlighted that between 2020 and 2024, 11 major airdrops distributed over $7 billion—a form of funding that AI lacks entirely. These token-based incentives inject liquidity into projects without the need for large VC rounds.

The Verdict: A False Comparison?

AI may be securing significantly more venture capital, but that doesn’t necessarily indicate that investors are losing interest in crypto. The industries function in vastly different ways—one relies on deep-pocketed firms, while the other taps into decentralized funding models.

Rather than seeing this as a race where AI is “winning” and crypto is “losing,” the reality is that both sectors are evolving with their own unique financial strategies.