AI startup funding hits first‑quarter records in 2026 as bubble warnings grow
Venture capital is flooding into artificial intelligence companies at an unprecedented pace in 2026, setting first‑quarter records and putting the year on track to surpass 2025, according to market researchers. The surge is stoking talk of a bubble, even as the largest players pull in massive rounds and strike heavyweight partnerships.
Crunchbase data shows $300 billion flowed into 6,000 startups worldwide during the first quarter of 2026, a quarterly record for AI venture funding. A separate study from S&P Global measured generative AI funding at over $140 billion in the same period, outpacing all of 2025.
Amid economic concerns, inflation, and the war in Iran, there were fewer deals overall, but rounds were larger than those seen in 2025. Some of the biggest names set the tone. kicked off 2026 with a series‑E round of $20 billion. OpenAI received $122 billion in March, at a valuation of $852 billion.
Anthropic raised $30 billion in a round that valued the company at $380 billion. Chip maker Nvidia invested in both OpenAI and Anthropic, striking deals to use Nvidia’s GPUs for their genAI models. Nvidia also invested in genAI startup Thinking Machines Lab, founded by Mira Murati, the former CTO (and temporarily CEO) of OpenAI.
“Investment velocity for 2026 is fast and on pace or ahead of 2025,” said John Mannes, a partner at Basis Set, a venture firm focused solely on AI. Jack Gold, principal analyst at J. Gold Associates, called it a gold rush. “There is lots of potential capital floating around out there in search of the next big thing.
AI is the next supposed killer investment, and no one wants to be left behind.” Gold also sees clear signs of an AI bubble, starting with a murky path to profitability. “Does AI have the potential to generate lots of revenues? Yes, but with the current spend rate on infrastructure, it’s hard to see how [AI vendors] can be revenue‑positive in the short term (two to three years),” he said.
Another warning sign, he added, is “circular financing” — for example, when Nvidia invests in a company that, in turn, promises to buy Nvidia products. “As long as people are willing to throw money at AI, then the bubble will remain. But if we hit a point where investors say, ‘We’ve put enough into the field; now show us how our investments will pay off’ (other than through inflated IPO stock prices), then the bubble will likely burst.
We’re not at that point yet, but it could happen if the economy goes south.” Clear winners and losers will emerge, said Brad Harrison, founding partner at Scout Ventures, which directs most of its AI investments toward military and defense technologies for deterrence on the battlefield.
“Without a doubt, we’re in an AI bubble,” Harrison said. He argued many AI companies will fail as platforms from larger vendors are used to create agents that handle the tasks those startups set out to solve. He pointed to tools like Claude Code that are already improving developer productivity.
“You’re going to see a lot of SaaS companies get a lot smaller… If you don’t need all these people doing all the work, then you don’t need all those software licenses.” Harrison also warned that infrastructure and energy demands have reached unsustainable levels, raising questions about the resources being devoted to AI.
“Is it good to devote these resources to feeding AI?… Do you think [citizens] want us to spend trillions of deficit that we don’t have on building AI infrastructure and energy? Or do you think they’d rather have some food?” he asked. For now, capital continues to chase AI.
Market researchers say 2026 is on pace to top last year’s totals, but investors caution that the durability of the boom will hinge on the broader economy — and on when backers start insisting on tangible returns.