What’s funding like in the generative AI market right now?

Summary

Generative AI funding is healthier right now: more companies are raising, the median round has doubled, and even after removing the megadeals, underlying capital is still up sharply.

The headline capital number is almost useless on its own. Disclosed funding rose to roughly $260.5 billion, but OpenAI's $110 billion financing alone represents about 42% of that total; excluding rounds above $100 million, capital still increased about 40%.

The expansion is broad enough to be real. Deal count rose 11%, funded companies increased about 12.5%, and the median financing moved from $10 million to $20 million, so the change reaches well beyond a handful of frontier-model labs.

The weak spot is startup entry. First financings fell slightly and Seed lost more than ten percentage points of deal share, even as first-check sizes increased. Investors are still backing new companies, just less indiscriminately than before. Seed losing share while first checks grow is the kind of signal we track every quarter in our generative AI market report.

The middle of the market has changed a lot. Sub-$5 million rounds collapsed as a share of disclosed financings, while $20 million to $100 million rounds became much more common. That's a cleaner sign of market maturation than the giant OpenAI and Anthropic numbers.

Follow-on capital is where much of the growth now sits. Follow-on deals increased from 219 to 274, their median size rose from roughly $22 million to $32 million, and later-stage rounds gained share across Series B, Series C and Series D+.

Developer platforms and governance are taking more attention. Developer-platform deals increased from 88 to 107 and governance deals nearly doubled from 26 to 51, while enterprise applications remain the largest category but no longer dominate deal growth the way they did.

Frontier-model funding has become a separate economic layer inside Generative AI. Foundation-model companies represent only about 7% of deals but absorb close to 88% of disclosed capital, largely because their compute, chips, training and cloud needs now resemble infrastructure spending.

Strategic investors matter more than they did a year ago. Around 26% of current deals include a strategic investor, and cloud providers, chipmakers and large software companies are increasingly funding startups that also buy their infrastructure or plug into their distribution.

The market is also asking for more proof outside frontier research. Large application and developer-tool rounds increasingly come with revenue, customer-adoption or production-usage evidence, while exceptional frontier teams can still raise huge sums on technical ambition before conventional commercial metrics exist.

So the boom is real, but it is not a sixfold improvement in ordinary startup funding. The better description is a broader, richer and more mature market whose strongest growth now comes from companies moving through the funding cycle rather than from a surge in brand-new Seed experiments.