Big AI bets divide venture capital, leaving smaller funds behind

Venture capital used to be a game where a scrappy fund with a good thesis could punch above its weight. That era is looking increasingly quaint. AI startups have become such a gravitational force in the funding universe that smaller VC firms, including those focused on crypto, are finding themselves starved of both capital and attention. In the first quarter of 2026, global VC deployment hit a record $297 billion. AI startups captured 81% of that total, roughly $242 billion. To put that in perspective, AI’s share of global venture funding sat at 30% as recently as 2022. It climbed to 61%, or about $258.7 billion, across all of 2025. The mega-deal machine Mega-rounds exceeding $100 million accounted for approximately 73% of total AI deal value in 2025. Fewer than 3% of all deals generated the majority of invested capital. When a handful of companies vacuum up most of the oxygen in the room, the remaining startups, whether they’re building in crypto, fintech, biotech, or anything else, are left competing for roughly 19% of the global VC pie. OpenAI alone raised $122 billion in a single funding round during Q1 2026. That one deal represented more than 40% of the entire quarter’s globa...