The artificial intelligence (AI) sector is experiencing an unprecedented boom, as detailed in a recent CB Insights report analyzing Q1’25 trends.
The research report noted that AI funding surged to a record $66.6 billion, a 51% increase quarter-over-quarter (QoQ), driven by massive investments in infrastructure firms and growing specialization in vertical applications like healthcare.
Meanwhile, AI agent companies are fueling a wave of mergers and acquisitions (M&A), signaling consolidation in high-growth markets.
These trends highlight the dynamic evolution of the AI stack, from foundational infrastructure to specialized applications, reshaping industries and investor priorities.
In Q1’25, AI funding reached $66.6 billion across 1,134 deals, nearly two-thirds of the total $101.5 billion invested in 2024.
This surge, representing a new quarterly record, was propelled by mega-rounds to industry incumbents, notably OpenAI’s colossal $40 billion venture capital round, Anthropic’s $3.5 billion Series E, and Safe Superintelligence’s $2 billion Series B.
Even excluding OpenAI’s outlier, Q1’25 would rank as the second-highest funding quarter ever, trailing only Q4’24.
The relatively stable deal count, down just 7% QoQ, indicates that larger deal sizes—rather than a surge in deal volume—are driving this growth.
The median deal size hit a four-year high of $5 million, reflecting investor confidence in established players scaling AI infrastructure to meet demand.
While infrastructure companies captured the bulk of funding, healthcare AI emerged as the leader in new unicorn creation, with six of the 11 AI companies reaching $1 billion-plus valuations in Q1’25 hailing from this sector.
These healthcare AI unicorns accounted for 55% of new AI unicorns and 30% of all new unicorns across venture capital, underscoring the sector’s rising prominence.
Companies like Hippocratic AI (patient follow-up), Abridge (clinical documentation), and OpenEvidence (healthcare decision-making) are at the forefront, with half of these unicorns focusing on clinician-support tools.
This trend reflects growing demand for AI solutions that streamline provider workflows and strong investor conviction in healthcare AI’s ability to deliver transformative returns.
The diversity of applications, from AI-driven drug discovery (Insilico Medicine) to patient care models, highlights the sector’s potential to address critical challenges across the care continuum.
AI agent technologies, designed to automate complex enterprise tasks, dominated M&A activity in Q1’25, securing the three largest of 85 acquisitions.
Companies like Moveworks, Weights & Biases, and OfferFit led the charge, reflecting a consolidation trend in agent development platforms and multi-agent systems.
These markets claim some of the highest Mosaic scores—metrics of company health and growth potential—averaging 705-721 compared to an industry baseline of 370.
The focus on agentic solutions underscores enterprise demand for comprehensive AI tools that provide competitive advantages through automation and orchestration.
High Mosaic scores signal robust market health, suggesting more exits may follow as buyers seek to bolster their AI capabilities.
The Q1’25 trends indicate that the AI industry at a pivotal moment.
Record-breaking funding, led by infrastructure providers, signals confidence in AI’s foundational technologies.
Simultaneously, the rise of healthcare AI unicorns and consolidation in agent markets reflect increasing specialization and market maturity.
As 2025 progresses, CB Insights predicts that full-year funding could surpass all previous records, driven by these dynamics.
The interplay between horizontal infrastructure and vertical applications, coupled with strategic M&A, should continue to shape the AI landscape.