Silicon Valley's AI Gold Rush: Startups Hit $100M+ as Chinese Models Power the Race

In 2025, the U.S. AI startup ecosystem has witnessed unprecedented momentum, with 33 firms securing funding rounds of $100 million or more, signaling continued investor confidence in the sector. As reported by TechCrunch, this year’s trend mirrors 2024’s record-breaking pace, with multiple rounds surpassing $1 billion in size and several startups securing more than one "mega-round." The surge in capital underscores the growing impact of AI across industries, from healthcare and legal tech to infrastructure and enterprise software.

The startups securing these significant investments include companies like EliseAI, which raised $250 million in a Series E round valuing it at $2.2 billion, and Decart, an AI research lab that secured $100 million at a $3.1 billion valuation. Notable rounds also included Fal, a generative media platform that closed a $125 million Series C round led by Meritech Capital Partners, and Thinking Machines Lab, which raised a record $2 billion in a seed round led by Andreessen Horowitz and valued at $12 billion.

Healthcare emerged as a particularly active sector, with firms like Abridge and Harvey raising substantial capital. Abridge, for instance, secured $300 million in a Series E round valuing it at $5.3 billion, while Harvey, which develops AI tools for the legal industry, raised its second $300 million round of the year at a $5 billion valuation. These investments highlight the increasing integration of AI into critical industries, where automation and data-driven insights are reshaping traditional workflows.

Enterprise software and infrastructure also saw strong performance, with companies like Glean and Anysphere attracting significant backing. Glean, an enterprise search platform, raised $150 million in a Series F round led by Wellington Management and valued at $7.25 billion, while Anysphere, behind the AI coding tool Cursor, secured a $900 million Series C round valuing it at nearly $10 billion. These developments illustrate the sector’s pivot toward scalable AI solutions that address complex operational challenges.

Investor activity in the AI space has been dominated by a handful of venture capital firms, including Andreessen Horowitz, Sequoia Capital, and Lightspeed Venture Partners. These firms have played a pivotal role in funding multiple startups across various stages, reflecting their long-term strategic bets on the technology. Additionally, traditional tech giants like Google , Microsoft , and Nvidia have participated in several rounds, further signaling the broader industry’s commitment to AI.

Interestingly, the landscape of AI startups is not only being shaped by U.S.-based firms but also by the growing influence of Chinese open-source AI models. According to Martin Casado, a partner at Andreessen Horowitz, up to 80% of U.S. AI startups are currently using Chinese open-source models in their operations. This shift reflects a cost-effective strategy for startups aiming to reduce reliance on expensive proprietary models from companies like OpenAI and Anthropic.

Despite the rapid growth and innovation in the AI sector, challenges remain. The integration of open-source models raises questions about data privacy and security, while the competitive pressures to innovate rapidly can strain early-stage startups. However, the current trajectory suggests that the U.S. AI ecosystem is not only resilient but also evolving to incorporate global technological advancements.

The convergence of U.S. and Chinese AI strategies is also evident in their respective AI action plans. Both nations are focusing on accelerating domestic AI adoption, promoting global diffusion, and managing risks without stifling innovation. This strategic alignment underscores a shift in global AI competition from ideological confrontation to a race for productivity gains and technological influence.

As the year progresses, the performance of these AI startups and the outcomes of their funded initiatives will serve as key indicators of the sector’s sustainability and broader economic impact. With continued investments and strategic collaborations, the U.S. AI landscape appears poised to maintain its leadership in the global tech ecosystem.