## AI Investment Reaches Unprecedented Heights

Venture capitalists have poured **$192.7 billion** into AI startups so far this year, setting new global records. According to data from **PitchBook**, 2025 is on track to be the first year where **more than half of all VC dollars** flow into the AI industry.

## Funding Trends and Market Dynamics

Most of this capital has been directed towards **established startups**, with companies like **Anthropic** and **xAI** raising billions in funding this quarter. In contrast, many lesser-known upstarts, particularly those not focused on AI, have struggled to secure investments. The ongoing challenges in public listings and acquisitions have made venture investors cautious, leading to a reluctance to back unproven companies.

Venture capitalists poured $192.7 billion into AI startups so far this year — setting new global records and putting 2025 on track to be the first year where more than half of total VC dollars went into the industry, according to data provider PitchBook.

AI Startups Soar: $192.7 Billion in VC Funding Dominates 2025

![Almost 60% of young people in the U.K. are interested in starting their own businesses, per the Generation Entrepreneur Report.](https://image.cnbcfm.com/api/v1/image/108206877-1759396669646-gettyimages-2097109502-stew07452.jpeg?v=1759419418&w=1858&h=1045&vtcrop=y)

Young Brits are catching flak for their apparent lack of entrepreneurial drive, sparking a broader debate on whether the **UK startup scene is facing an ambition deficit**.

It started when **UK Business Secretary Peter Kyle** criticized British university students for lacking the same interest in starting a business as their American peers. "In Britain, if you went to a group of undergraduates, how big would that group have to be before you found someone that said their choice of going to university…was because they wanted to become a founder?" Kyle said at an event hosted by AI chipmaker Nvidia in London. "The entrepreneurialism simply isn’t there – the drive, the vigour."

He’s not alone; the tech and startup scene in the UK is often viewed as lacking the same intensity and speed as its counterparts in the US and China. It’s led some venture capitalists to suggest that European founders need to work harder and adopt the rigorous **"996" work schedule** — 9 a.m. to 9 p.m. six days a week — infamous at China’s tech companies.

## Risk Aversion

The stereotypes are not necessarily backed up by the data, however. Almost **60% of young British people were interested in starting their own business**, according to a recent study conducted by the Federation of Small Businesses (FSB) and Simply Business of 2,079 people between the ages of 18 and 34 in the UK. However, only 16% of them actually took the leap into entrepreneurship, with most citing a **lack of formal business education** as holding them back.

"There’s definitely a large appetite to explore entrepreneurship from a very young age," Dama Sathianathan, senior partner at Bethnal Green Ventures, told CNBC Make It. "It’s just getting really hard to show ambition when **the system is rigged against you** … You don’t have the right supportive infrastructure to be able to tap into money, to really have the drive to aim high."

Bristol-based entrepreneur Tom Wallace-Smith made Forbes 30 under 30 in Europe last year — but he said entrepreneurship feels out of reach to most people in the UK. "From people’s public perceptions, the whole track of Elon Musk or Jeff Bezos or Mark Zuckerberg feels quite mythological to people, it’s totally out of someone’s reach," Wallace said in an interview with CNBC Make It.

Wallace, who co-founded nuclear fusion startup Astral Systems in 2021 while finishing a PhD in nuclear physics at the University of Bristol, said he initially didn’t know that entrepreneurship was a viable career path, and expected to end up in a big company or become an academic. He argued that the UK has no shortage of successful entrepreneurs, but the government and media "could do a better job of telling founders’ stories" and increasing exposure to startup environments.

A lot of people in the UK see entrepreneurship represented via comedic reality TV shows like The Apprentice or Dragons’ Den, Wallace-Smith said, and are lacking role models. "It’s more about making fun of them rather than championing them." The FSB and Simply Business survey found that 15% of young current or aspiring entrepreneurs said that seeing others succeed would boost their confidence, but over a third hadn’t received any guidance or support from local entrepreneurs or businesses.

![Young people are choosing corporate careers over starting a business because it’s too risky.](https://image.cnbcfm.com/api/v1/image/108205826)

Harry Stebbings, venture capitalist and founder of the 20VC podcast, puts some of the blame at the door of **"risk-off" British parents**, with the instability surrounding entrepreneurship making it an unattractive career path. Instead, Stebbings — who’s a champion of the 996 work week — said young people seem to aspire to work at corporate firms like Goldman Sachs and McKinsey.

## ‘Here with Gritted Teeth’

Astral System’s Wallace-Smith said many UK entrepreneurs aren’t seeing enough "direct incentive" to scale and grow in the UK as opposed to the US — indicating that it’s largely a **structural issue** that’s fueling the entrepreneurship deficit. "The ones that are left in the UK are here with gritted teeth, like by hook or by crook, to make sure that we have success in the UK because I just care about the country and I want to see this succeed here… It’s more of an outlier than the standard," he said.

Atomico’s State of European Tech 2024 identified a **talent leakage to the US**, with at least 800 companies that could have been founded in Europe instead being established across the Atlantic. It also found that established startups trying to scale up past the seed funding stage tend to struggle to secure investment. In fact, twice as many US companies — 8.3% — raise rounds of $15 million or more, compared with Europe’s 4.1%.

> "If you’re faced with continuously having to struggle, why would you choose to struggle on this entrepreneur path?"
> Dama Sathianathan, Senior Partner at Bethnal Green Ventures

Additionally, half of European companies have turned to the US to secure a lead investor since 2015, according to the report. Although risk appetite continues to exist among British entrepreneurs, it doesn’t for investors, Sathianathan said, noting that **VCs in the UK don’t want to risk their money**.

Damian Routley, a chief operating officer at venture studio and startup accelerator Founders Factory, said the financial incentives for founding a company as a young person are "increasingly weak" with tax reliefs for both entrepreneurs and investors diminishing since the Covid-19 pandemic in 2020. The lifetime allowance for Business Asset Disposal Relief (BADR) has been slashed from £10 million ($13.45 million) to £1 million, while Capital Gains Tax (CGT) rates have risen, leaving founders with smaller payouts when they sell their companies. "This all means it’s harder to take the plunge and launch a business than to go for the safety of a PAYE grad job," he told CNBC Make It.

Meanwhile, some early-stage funding incentives are considered generous, but are focused on investors, leaving many startups struggling to secure the capital they need to grow. "It’s a structural issue, which then seeps into it becoming a cultural issue, because if you’re faced with continuously having to struggle, why would you choose to struggle on this entrepreneur path?" Sathianathan added.

## ‘Europe’s Premier Startup Hub’

It’s not all doom and gloom, though, as the UK remains **"Europe’s premier startup hub,"** Routley said. In 2024, £9 billion was invested into venture-backed businesses in the UK, maintaining the country’s position as the third-largest VC market behind the US and China, according to the British Private Equity & Venture Capital Association’s Venture Capital in the UK 2025 report.

Various incubators and accelerators have also been set up to encourage young people to go into business. Alongside Founders Factory, others include SETsquared, UCL’s Hatchery, and Techstars. Additionally, 20VC’s Stebbings recently launched Europe’s equivalent of the Thiel Fellowship — a program which gives $200,000 to young people under the age of 22 who want to build innovative startups. Alumni of the US program include billionaire Lucy Guo to Ethereum co-founder Vitalik Buterin.

Stebbings’ Project Europe, backed by 128 different founders from firms including Klarna, Mistral and Soundcloud, is a fund which will award 200,000 euros ($234,684) to select founders who are 25 years old or younger. However, the UK’s House of Lords’ Communications and Digital Committee warned earlier this year that the UK is at risk of becoming an **"incubator economy"** — as ideation remains strong, but the ability to scale and grow remains weak.

"If we can’t solve our pathways to capital markets and incentivise sovereign IP [intellectual property] to stay here, then we risk losing our best companies to better structured regimes with greater liquidity potential," Routley said. "The ambition is there, but the ladder is missing a few rungs."

"The ones that are left in the U.K. are here with gritted teeth, like by hook or by crook," one founder told CNBC Make It of Britain's entrepreneurs. 

Is the UK's Startup Scene Rigged Against Entrepreneurs? Founders and VCs Reveal the Shocking Truth

## OpenAI's Strategic Acquisition of ROI

In a bold move to **strengthen its foothold in the financial sector**, OpenAI has acquired the investing app startup **ROI** and hired its CEO and co-founder, **Sujith Vishwajith**, to join its technical team. This acquisition signals OpenAI's deepening commitment to integrating AI into finance, leveraging the expertise from ROI to enhance its capabilities.

### Impact on ROI and the Market

Following the acquisition, ROI announced it will **shut down its app**, redirecting its resources and talent towards OpenAI's projects. This decision underscores the strategic nature of the deal, focusing on internal development rather than maintaining the standalone product.

### Broader Trends in AI and Finance

Since the early days of **ChatGPT**, major financial institutions like **J.P. Morgan** and **Morgan Stanley** have adopted the AI-powered chatbot to assist employees with financial queries. Additionally, consumers are increasingly relying on such tools for a wide range of financial tasks, highlighting the growing intersection of AI and everyday finance.

This acquisition could pave the way for more **innovative AI applications in investing and financial services**, potentially transforming how businesses and individuals manage their finances.

 OpenAI has bought investing app startup ROI and hired its CEO and co-founder, Sujith Vishwajith, to join its technical staff, a spokesperson for the ChatGPT maker said. ROI said it will shut down the app. 

 Since ChatGPT’s early days, financial firms such as  J.P. Morgan and Morgan Stanley  have used the AI-powered chatbot to answer employees’ financial questions, and consumers use it for all

OpenAI's Secret Move: Acquires Investing App Startup ROI, Hires CEO to Supercharge AI in Finance

![Naveen Rao](https://s.yimg.com/ny/api/res/1.2/HnMyFwyyUh38iVCYjVH27g--/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTgwMDtjZj13ZWJw/https://media.zenfs.com/en/techcrunch_finance_785/443233c9bc90a0551bd7a4ddf509ee56)

*Image Credits: Naveen Rao*

## The Rise of a New AI Hardware Challenger

**Naveen Rao**, the former head of artificial intelligence at Databricks, is in advanced discussions to raise **$1 billion** at a staggering **$5 billion valuation** for his new startup, **Unconventional, Inc.**, according to four sources familiar with the matter. The company is developing a revolutionary type of computer designed to compete directly with **Nvidia**.

## Major Backing from Top-Tier Investors

**Andreessen Horowitz** has committed to leading this massive investment round, with participation from **Lightspeed** and **Lux Capital**, two sources confirmed. While these VC firms haven't commented publicly, the involvement of such prominent names signals strong confidence in Rao's vision. Additionally, **Databricks** is reportedly investing in the new venture, as Bloomberg previously revealed.

## Aggressive Funding Strategy

Rao has already secured **hundreds of millions** in initial funding and plans to begin operations without waiting for the full $1 billion to close. The remaining capital will be raised in installments through a **tranched funding round**, allowing for flexible capital deployment as the company scales.

## Vision for Revolutionary AI Computing

Although Rao declined to comment directly, he publicly acknowledged the startup on X, describing its ambitious goal: "rethinking the foundations of a computer to build a new substrate for intelligence that is as efficient as biology. Brain Scale Efficiency without the biological baggage!" This suggests a focus on creating **highly efficient AI systems** that mimic biological intelligence.

## Proven Track Record in AI Innovation

Rao's previous startup, **MosaicML**, was acquired by Databricks in 2023 for **$1.3 billion**. Founded in 2020, MosaicML specialized in training and deploying large AI models and had raised $33.7 million from investors including Lux Capital, DCVC, Playground Global, and Samsung Next. Before that, Rao co-founded **Nervana Systems**, a machine learning platform acquired by Intel in 2016 for over **$400 million**.

## Departure from Databricks to Focus on New Venture

Rao recently left his role as VP of AI at Databricks, a company now valued at **$100 billion** with $4 billion in annual recurring revenue, to dedicate himself fully to Unconventional, Inc. His departure and the startup's formation were first reported by Bloomberg last month.

## Direct Competition with Nvidia

Sources indicate that Rao's vision involves designing a **novel AI machine** that integrates both **custom silicon chips** and **server infrastructure**, positioning it as a direct competitor to Nvidia in the AI hardware space.

Former Databricks AI chief is raising $1 billion to build an Nvidia rival through a novel approach.

Naveen Rao's Secret AI Hardware Startup Aims for $5B Valuation to Challenge Nvidia's Dominance

**Cerebras Systems Inc.**, a prominent player in **artificial intelligence computing** and chip manufacturing, has officially withdrawn its registration for an **initial public offering (IPO)**. This move comes over a year after the company first announced its intentions to go public.

In a recent filing with the **Securities and Exchange Commission (SEC)**, Cerebras stated that it does not plan to proceed with the IPO as outlined in its previous documents. The filings had not yet been declared effective, allowing for this withdrawal without immediate market impact.

This development raises questions about the future strategies of **AI startups** in the rapidly evolving tech landscape, especially those focused on **high-performance computing** and data center operations.

Cerebras Systems Inc. has filed to withdraw paperwork for an initial public offering more than a year after publicly unveiling plans.

AI Chip Giant Cerebras Shocks Market by Withdrawing IPO Plans – What's Next?

## The $1 Million Ad Campaign That Backfired – Or Did It?

New Yorkers are taking matters into their own hands, defacing ads for **Friend**, an AI companion startup, across the city's subway system. The campaign, which cost the company over **$1 million**, included more than 11,000 subway car ads, over 1,000 platform posters, and 130 urban panels.

![A defaced Friend ad in New York City.](https://i.insider.com/68e011ad1c1f80efbec4e703?width=700)

### CEO Calls Response "Entertaining"

**Friend CEO Avi Schiffmann** isn't bothered by the backlash. In fact, he finds it "quite entertaining." During an interview on the "Access" podcast, Schiffmann shared his thoughts on the public's reaction to the massive ad buy.

"I think a lot of people think it's an excruciatingly large amount of money to spend, but I actually think it's really quite cheap," he said. "To buy the entirety of New York's subway for a million dollars doesn't really feel that expensive, especially for the amount of external publicity from it."

### What Is Friend?

**Friend** is an **AI companion** designed as a pendant necklace. The device listens to conversations unprompted and responds through a related app on the user's phone, positioning itself as a wearable tech friend.

![Friend launched an ad campaign across New York City.](https://i.insider.com/68e0125a5dbc4fd10daa29e6)

### Public Backlash and Graffiti

Skeptical New Yorkers have defaced many ads with **anti-AI graffiti**. Messages like "Human connection is sacred," "AI is not your friend," "AI wouldn't care if you lived or died," and "surveillance tool" have been scrawled across posters, highlighting concerns about privacy and the role of AI in daily life.

![Some New Yorkers are defacing the ads.](https://i.insider.com/68e0125a5dbc4fd10daa29e5)

### Positive Outcomes Amid Criticism

Despite the negative reactions, Schiffmann reported a "large uptick in sales & traffic" since the campaign launched. He remains optimistic, believing that as **AI technology improves** and culture adapts, people will become more accepting of AI companions.

"There's going to be one company that comes to your mind, ideally," Schiffmann said. "All roads lead back to Friend.com."

### The Broader Context of AI Companions

AI companions, marketed as friends, coworkers, or romantic partners, are becoming more common. A survey by Common Sense Media found that while over a quarter of teenagers had never used an AI companion, **52% used them at least a few times a month**.

However, overreliance on AI can have serious consequences. In one case, parents sued OpenAI after their 16-year-old son died by suicide, alleging he used ChatGPT to explore suicide methods. OpenAI has since introduced new safeguards for "sensitive situations."

OpenAI CEO Sam Altman has expressed concern, stating that young people "rely on ChatGPT too much" and that such dependence feels "dangerous."

### Schiffmann's Final Take

Despite the controversy, Schiffmann considers the campaign a success. "It's a huge success so far, so I'm happy," he concluded.

New Yorkers are defacing  ads for Friend, an AI companion startup. The campaign cost the company over $1 million.

NYC Subway's $1M AI Companion Ad Campaign Gets Vandalized – And the CEO Loves It!

## Supabase's Meteoric Rise

It's been a whirlwind year for **Supabase**, the **vibe-coding world's database of choice**. On Friday, Supabase announced it raised a fresh **$100 million Series E** at a **$5 billion valuation**, led by **Accel** and **Peak XV**. This milestone comes just **four months after closing its $200 million Series D at a $2 billion valuation**, also led by Accel.

![Supabase co-founders, Ant Wilson, Paul Copplestone](https://techcrunch.com/wp-content/uploads/2025/04/Supabase-Ant-Wilson-Paul-Copplestone.jpg?w=1024)

### Rapid Fundraising Timeline

- **Series D**: $200 million at $2 billion valuation (April 2025)
- **Series C**: $80 million led by Peak XV and Craft Ventures (September 2024) - PitchBook estimated a post-money valuation of around **$765 million**

In total, Supabase has raised **$380 million in just one year**, with a **more than 500% valuation increase** assuming PitchBook's Series C estimates are accurate. The company has now raised a total of **$500 million**.

### Origins and Growth

**Open source database service Supabase** was founded in 2020 by **CEO Paul Copplestone** and **CTO Ant Wilson**. It started as a **Y Combinator startup** offering developers a **Postgres-based open source alternative to Google's Firebase**. Supabase combines **Postgres** with other enterprise-grade open source tools for features like:
- **Authentication**
- **Auto-generated APIs**
- **File storage**
- **Vector toolkit** (essential for many AI apps)

Supabase simplified setting up a database to just a few clicks, making it a popular backend for **vibe-coding tools** that write apps with natural language prompts. It's increasingly used as the database of choice for:
- **Figma**
- **Replit**
- **Cursor**
- **Claude Code**
- **Lovable** and **Bolt**

### Community Involvement

Because Supabase is **open source** and supported by a community of developers—claiming **4 million developers as users**—the company is allowing **community members to buy stock** as part of this Series E funding.

It's been a wild year of growth and fundraising for vibe-coding database of choice, Supabase.

Supabase's Valuation Skyrockets to $5 Billion in Just Four Months - Here's How They Did It

## Groq's Rapid Data Center Growth

AI startup Groq is aiming to establish **more than twelve data centers** next year, according to CEO Jonathan Ross.

The company has already set up **12 data centers this year**, and wants to top that figure, as reported by the [Wall Street Journal](https://www.wsj.com/business/ai-unicorn-groq-charts-data-center-expansion-plan-5d6a130e).

During an interview, Ross said that people should "expect that [number] to grow rapidly."

## Global Expansion and Success Factors

Thus far, Groq has a presence in the **US, Canada, the Middle East, and Europe**, with plans to establish data centers in **Asia**. According to Ross, the company has seen a lot of success in Asia - particularly **India** - which he puts down to Groq's ability to produce and deploy chips faster, and their **lower power usage than GPUs**.

Speaking on the company's demand, Ross said: "Every time we overcompensate by trying to build more, people surprise us by needing even more than we built."

## Partnerships and Infrastructure Details

Groq is a known customer of **Equinix data centers**, having leased capacity at a facility in [Helsinki, Finland](https://www.datacenterdynamics.com/en/news/groq-leases-space-at-equinix-data-center-in-helsinki-finland/), earlier this year. Elsewhere, the company has a presence in the US (Equinix and DataBank), Canada (Bell Canada), and Saudi Arabia ([Humain](https://www.datacenterdynamics.com/en/news/humain-turns-to-groqs-inference-chips-for-saudi-arabian-ai-push/)).

In [February 2025](https://www.datacenterdynamics.com/en/news/groq-secures-15bn-from-saudi-arabia-to-expand-ai-inference-infrastructure-in-the-region/), Groq secured **$1.5 billion in investment from Saudi Arabia** to expand AI inference infrastructure in the country. The funding will be used to support the expansion of Groq’s existing data center in Dammam, which will support the development of the Saudi Data and Artificial Intelligence Authority’s (SDAIA) Arabic Large Language Model, **ALLaM**.

## Funding and Company Background

Last year saw the company closing a [$640m](https://www.datacenterdynamics.com/en/news/groq-closes-640m-funding-round-hires-meta-and-former-hp-and-intel-execs/) funding round. Led by **BlackRock**, the round also saw participation from Neuberger Berman, Type One Ventures, Cisco, KDDI, and Samsung Catalyst Fund. According to the WSJ, Groq was most recently valued at **$6.9bn**.

Groq was co-founded in 2016 by Ross, who previously helped lead **Google's Tensor Processing Unit development**. The company provides dedicated chips and accelerators within its own servers and racks designed for **artificial intelligence, machine learning, and high-performance computing**.

Company has already set up 12 data centers in 2025

AI Startups Soar: $192.7 Billion in VC Funding Dominates 2025

Summary:

AI Investment Reaches Unprecedented Heights

Funding Trends and Market Dynamics

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Groq's Ambitious AI Expansion: Over a Dozen New Data Centers Coming in 2026