"In 2025, AI and machine-learning deals accounted for nearly two-thirds of all U.S. venture capital dollars - up from roughly 10% a decade earlier. This level of concentration reflects a real and powerful shift."
"Some of the strongest, most valuable companies in the world are explicitly not AI businesses. Their success is driven by durable competitive advantages, attractive unit economics, disciplined execution, and the ability to compound through cycles."
"As attention concentrates around AI, valuation dispersion has widened. Perceived AI category leaders can raise multiple rounds in rapid succession, often at successively higher prices, reinforcing momentum and further concentrating capital."
"Despite strong fundamentals and large addressable markets, many high-quality non-AI businesses may attract less investor demand simply because they lack an explicit AI story."
AI and machine learning have become central to investment, accounting for two-thirds of U.S. venture capital in 2025. This shift indicates a significant technological transformation affecting productivity and competitive dynamics. While many growth companies benefit from AI, not all successful firms are AI-centric. Public markets show that strong companies can thrive without being AI-focused. However, private markets reflect a disparity in valuations, with AI companies attracting more capital, leaving high-quality non-AI businesses at a disadvantage. This situation presents both risks and opportunities for investors.
Read at Fortune
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