AI Investment Trends: North America Leads Despite Political Challenges

North America Dominates AI Venture Capital

Despite perceptions of a challenging environment for AI research and development, North America continues to be the primary recipient of venture capital investments in the field, as indicated by data from PitchBook.

Investment Figures: February - May

From February to May of the current year, venture capitalists allocated $69.7 billion to AI and machine learning startups located in North America, spanning 1,528 investment deals.

This contrasts sharply with the $6.4 billion invested by VC firms in European AI ventures during the same timeframe, distributed across 742 deals.

Asia's Investment Landscape

AI startups based in Asia have experienced comparatively lower investment levels. Between February and May, VCs invested $3 billion in Asian AI startups, completing 515 deals.

U.S. Policies and Their Impact

Under the presidency of Donald Trump, funding for scientific grants focused on fundamental AI research has been substantially reduced.

Furthermore, the process for foreign students specializing in AI to study within the U.S. has become more complex, and the potential dismantling of university-based AI labs has been threatened through the freezing of federal funds.

The administration’s trade policies, including the implementation of retaliatory tariffs, have contributed to market instability, creating unfavorable conditions for nascent AI ventures.

Criticism of Elon Musk

In a March post on X, renowned AI pioneer and Nobel laureate Geoffrey Hinton advocated for the removal of billionaire Elon Musk from the British Royal Society.

Hinton cited the significant detriment Musk is allegedly causing to scientific institutions within the United States as the reason for this call.

European Ambitions and Investment

Given Europe’s stated ambition to become a global leader in AI, one might anticipate a greater influx of venture capital, particularly in response to the contentious policies enacted in the U.S.

These U.S. policies have generated uncertainty among founders, investors, and researchers. The EU has also pledged substantial financial support – hundreds of billions of euros – to foster AI development across its member states, and boasts several successful, well-funded AI startups, such as Mistral, H, and Aleph Alpha.

Investment Trends Remain Consistent

However, the expected shift in global investment patterns has not materialized. There is currently no evidence of a significant movement of venture capital away from North America, nor a substantial increase in AI funding in other regions.

China and Export Controls

A similar trend is observed in China, which has produced notable AI startups like DeepSeek and Butterfly Effect (the creators of the Manus agentic platform).

Nevertheless, venture capital activity in China and the broader Asian region remains relatively subdued, potentially influenced by export controls that restrict certain Asian countries’ access to AI chips.

Year-to-Date Funding Statistics

In 2024, North American startups secured 75.6% of all venture capital funding for AI – a total of $106.24 billion. This proportion has further increased in the current year.

As of now in 2025, North American AI investments account for 86.2% ($79.74 billion) of all global venture capital funding allocated to AI.

The U.S. Remains the Hub

This presents a somewhat unexpected scenario. Despite increasing political and regulatory challenges, even with a potential second term for Trump, the U.S. continues to be the dominant center for AI capital.

Investors, despite any fatigue caused by the administration’s unpredictability, still anticipate that U.S. innovation will yield the most substantial returns, at least in the immediate future.