The sharp rise in deal value comes despite a near 25pc drop in total transactions, with VCs concentrating on fewer but larger deals.
Global venture capital investment in generative artificial intelligence (GenAI) has grown to $49.2bn in the first half of 2025, surging past the $44.2bn that was spent in the whole of 2024, finds a new EY report.
According to the consultancy firm’s latest Generative AI Key Deals and Market Insights study, the total value of GenAI VC deals in the first half of 2025 has also grown to more than double the total of 2023.
Commenting on the findings, Grit Young, EY Ireland’s technology, media and telecoms lead said that this momentum is expected to continue and build further into the second half of this year.
The sharp rise in overall deal value comes despite a near 25pc drop in the number of total transactions this past six months compared to the second half of 2024, as VC firms are concentrating on more mature, revenue generating AI companies. This is resulting in fewer, but considerably larger deals.
The report finds that the average size for late-stage deals more than tripled in 2025 to more than $1.55bn, up from $481m in 2024. While the number of early-stage VC deals declined, angel and seed rounds remained the same.
Unsurprisingly, the US is leading GenAI VC investments, accounting for 97pc of the global deal value and 62pc of the total deals. While the Europe, Middle East and Africa region accounts for just 2pc of the deal value even as it counts 23pc of the total deals.
Overall, the massive volume of deals concentrated in the US means that of the 39 global AI unicorns, 29 are based in the US and just 3 in Europe.
However, AI is gaining momentum in VC deals in Europe, accounting for 20pc of all funding or around $8bn in total inflow, according to the French AI report from earlier this year.
Meanwhile, Middle Eastern countries such as the Kingdom of Saudi Arabia is ramping up investments in AI and GenAI, with the Public Investment Fund backing both domestic initiatives and international ventures.
Similarly, the Chinese government is making significant investments into AI, as is local capital. However, EY reports that the value is difficult to track.
Some of the largest GenAI VC deals this year includes SoftBank’s commitment to OpenAI which could reach $40bn, xAI’s $10bn funding round and Databricks, which reportedly raised $5bn.
AI giant and OpenAI rival Anthropic also raised $3.5bn earlier this year, with reports suggesting that the company is headed for another fresh raise which could value triple its value.
“While there was substantial concern at the start of the year with the launch of DeepSeek that investment in GenAI was likely to trend downwards, the results for the first half of the year point to a very different scenario,” Young said.
“We are seeing a clear pivot to fewer but more substantial investments, which are pointed towards more mature companies and platforms that can demonstrate they can deliver real-world impact and return on investment.
“GenAI is entering a new phase and the scale of investment reflects growing confidence in its commercial potential. The recent results from the ‘Magnificent Seven’ underscore how rapidly this technology is being adopted by customers and we would expect that the investment trajectory is likely to accelerate through the second half of the year and beyond.”
Locally, Sprout Social’s $55m acquisition of the Irish-founded NewsWhip makes for a welcome boost, said EY.
AI adoption in Ireland is growing, with 63pc of start-ups in the country using the tech and 36pc embedding it at the core of their business models.
However, the report finds that many AI start-ups are struggling with access to capital and infrastructure, particularly in the €1m to €10m funding space.
This finding is echoed by a recent Government report which argues for stronger supports for scale-up firms in the country that face a more than €1bn funding gap in the coming years.
“Many high-potential startups find themselves in a difficult middle ground, too advanced for early-stage support, yet not quite large enough to attract global VC attention,” Young said.
“However Ireland has a deep and well-established pool of talented entrepreneurs, and with increased collaboration between businesses, founders, academic institutions and policymakers there are plenty of opportunities to be seized.”
The Irish public sector stands to benefit strongly from GenAI, with 2024 Accenture survey finding that the technology has the potential to contribute nearly €150bn to Ireland’s annual gross domestic product by 2038.
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