Generative AI continues to gain venture capitalist funding, as the total deal value reached in the first half of 2025 exceeded the total value reached in all of 2024.

This rapid growth, which amounted to $49.2bn in the first half of 2025, shows no signs of slowing down as it is EY Ireland projects it to continue into the second half of 2025.

While the amount of capital rose, the actual deal volume fell in the first half of 2025 by 25% compared to the previous six months, EY Ireland found in its Generative AI Key Deals and Market Insights study.

The growth in deal value is driven by rising AI adoption by businesses as well as consumers, as well as increasing demand for AI solutions that are industry-specific. Further, AI infrastructure requirements, particularly when it comes to semiconductors, are also driving investment.

As training costs fall, generative AI investments have only become more attractive as major ROI seems more likely.

However, the reduction in the amount of deals reflects a maturing market, as GenAI reaches later stage, and therefore larger, investment rounds.

Late-stage investment transaction sizes increased three-fold to $1,533M from $481M in 2024.  However, early-stage VC rounds decreased, but angle and seed rounds were unchanged.

VC seem largely interested in organisations that employ third-party AI foundation models for specialised, industry-specific software.

Agentic AI has also released a new avenue for growth as a burgeoning sect of AI. Notable investments in this arena include Capgemini’s acquisition of WNS³ for $3.3bn, and SoftBanks’ investment in OpenAI.

While other regions make moves in the AI arena, the US’s dominance in AI VC funding has only increased.

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In the first half of 2025, the US accounted for 97% of the total deal value. It accounted for 70% of total deals in 2024, and 85% of the value of GenAI deals. The US’s share of deal volume, however, fell to 62%, reflecting a a downward trend in the number of total deals.

EMEA commands only 2% of deal value, and has actually fallen proportionally when it comes to the US.

“Europe has established a clear leadership position for itself in AI regulation but there is a fear in some quarters that this has been at the expense of innovation,” Grit Young, EY-Parthenon Partner at EY Ireland, wrote.

“This is not a binary question, however, and balance is required. It is important to regulate powerful technologies. On the other hand, regulation must not be allowed to impede innovation unreasonably, particularly if it applies only in one region.”