North America takes the bulk of AI VC investments, despite tough political environment

In a landscape described by some as increasingly challenging for AI research and development, North America continues to attract the majority of venture capital investments in artificial intelligence. According to data from PitchBook, from February to May of this year, venture capitalists invested a staggering $69.7 billion into AI and machine learning startups based in North America through 1,528 transactions. In contrast, European AI ventures garnered $6.4 billion across 742 deals in the same timeframe. Asian startups experienced even lower funding levels, with just $3 billion invested across 515 deals during the same period. The political climate in the U.S. has become more complex, especially under the administration of former President Donald Trump, which has notably reduced funding for scientific research related to AI. Policies have also made it increasingly difficult for international students specializing in AI to study in the U.S., and there have been threats to freeze federal funding for university AI labs. Additionally, the administration's trade policies, including retaliatory tariffs, have created an unstable environment for new AI ventures. In March, Geoffrey Hinton, a prominent AI researcher and Nobel Laureate, voiced concerns on social media, suggesting that billionaire Elon Musk should be removed from the British Royal Society due to the detrimental impact he believes Musk's actions have on scientific institutions in the U.S. Despite these challenges, one might expect Europe to capitalize on the opportunity to attract more venture capital, especially given its commitment to becoming a leader in AI. The European Union has pledged significant financial resources to foster AI development within its member states, boasting successful startups like Mistral, H, and Aleph Alpha. However, there's been no significant increase in venture capital flowing into Europe, nor a mass migration of investors seeking refuge from U.S. policies. The situation is similar in China, where startups such as DeepSeek and Butterfly Effect have emerged, yet overall VC activity in the region remains subdued, likely influenced by export controls limiting access to AI chips. As of 2024, North American companies captured 75.6% of all AI venture capital funding, totaling $106.24 billion, and that share has only grown this year. In 2025, North America accounted for an impressive 86.2% ($79.74 billion) of the global VC funding in AI. This trend underscores a surprising reality: despite increasing political and regulatory hurdles, the U.S. continues to be the epicenter for AI investment, with investors seemingly willing to overlook the uncertainties in pursuit of substantial returns driven by U.S. innovation.