Venture capital funding for AI and machine learning startups saw a significant surge in 2025, reaching 270.2 billion dollars, a 72 percent increase. This marked the first time AI ventures attracted more VC money than all other industries combined, accounting for 52.7 percent of total investments. North America received the largest share of this funding at 79.3 percent, with a notable 'megadeal' being Meta's 14.3 billion dollar investment in Scale AI. This trend indicates a strong investor focus on AI companies with robust business applications and infrastructure.
Several companies are making strides in the AI sector. Israeli startups Brandlight and WINN.AI collectively secured nearly 50 million dollars in new investments on February 11, 2026. Brandlight raised 30 million dollars for its platform analyzing AI-generated advertising, while WINN.AI secured 18 million dollars for its real-time AI sales assistant, which tripled its annual recurring revenue in 2025 and plans U.S. expansion. Separately, Gen Digital Inc. reported strong Q3 FY2026 results, with 1.24 billion dollars in revenue, a 26 percent increase, driven by its AI-powered security and financial wellness solutions. The company also raised its full-year 2026 revenue guidance to between 4.955 billion and 4.975 billion dollars and expanded its partnership with Equifax on February 4, integrating financial data into its AI portfolio.
Beyond traditional tech, Caterpillar Inc. has emerged as an unexpected beneficiary of the AI boom. Its shares reached record levels, and its market capitalization grew to 347 billion dollars by February 10. Caterpillar supplies essential equipment like turbines and generators for AI-driven data centers and infrastructure, reporting a record order backlog of 51 billion dollars and expecting mid-single-digit revenue growth for 2026, largely fueled by North American infrastructure spending. In personal finance, Lily Vittayarukskul, a Forbes 30 Under 30 honoree, created Waterlily, an AI platform for family financial planning that predicts long-term healthcare needs and offers product quotes.
However, the AI landscape also presents challenges and concerns. European shares dropped on February 11 due to worries that new AI models could reduce profits for traditional software companies, with Dassault's shares falling 9.7 percent. Financial firms also struggled amid these AI fears and disappointing U.S. retail sales. OpenAI faces a significant challenge in making its AI technology profitable; CEO Sam Altman views advertisements as a 'last resort' for ChatGPT revenue, as the company spent 5.5 billion dollars on operations last year while only bringing in 2 billion dollars. OpenAI aims to triple its revenue this year but needs to reduce losses before considering a public offering. Additionally, Alphabet plans a new debt sale, and xAI recently lost its second co-founder.
Ethical questions have also surfaced, particularly concerning Small Business Administration Administrator Kelly Loeffler's 3 million dollar investment in the private AI startup Groq in October 2025. Weeks later, in December, Groq secured a 20 billion dollar deal to license its AI technology to Nvidia, raising
Key Takeaways
- Venture capital funding for AI and machine learning startups reached 270.2 billion dollars in 2025, a 72 percent increase, making up 52.7 percent of total VC investments.
- Meta made a 14.3 billion dollar investment in Scale AI, contributing to the rise in large
Winn AI secures 18 million dollars for sales assistant
Winn.AI, a Tel Aviv-based startup, raised 18 million dollars in Series A funding. Their AI assistant guides sales representatives during calls in real time, helping them ask the right questions and reducing administrative work. Unlike other tools that analyze calls afterward, Winn.AI offers proactive support. The company has tripled its annual recurring revenue in 2025 and plans to expand its U.S. team and invest more in research and development. It serves dozens of customers and is growing in the UK and Europe.
Israeli AI startups raise 50 million dollars for business tools
Two Israeli startups, Brandlight and WINN.AI, announced nearly 50 million dollars in new investments on February 11, 2026. Brandlight secured 30 million dollars in Series A funding for its platform that analyzes AI-generated advertising and provides marketing recommendations. WINN.AI raised 18 million dollars for its AI agent that assists sales teams in real time during customer conversations. Both companies plan to expand their operations, with WINN.AI focusing on the U.S. market.
Gen Digital reports strong earnings with AI security growth
Gen Digital Inc. announced strong financial results for Q3 FY2026, ending January 2, 2026. The company reported 1.24 billion dollars in revenue, a 26 percent increase from the previous year, and earnings per share of 0.44 dollars. These figures surpassed analyst expectations. Gen Digital focuses on providing cybersecurity and financial wellness solutions, showing a strong balance sheet and profitability. The company is well-positioned to benefit from the growing demand for its products.
Gen Digital expands AI security and financial wellness solutions
Gen Digital Inc. reported record quarterly bookings of 1.32 billion dollars, a 27 percent increase year over year, driven by its AI-powered security and financial wellness solutions. The company raised its full-year 2026 revenue guidance to between 4.955 billion and 4.975 billion dollars. Gen Digital also expanded its partnership with Equifax on February 4. This collaboration will integrate Equifax's financial data into Gen Digital's AI portfolio and use Gen Digital's "Engine by Gen" platform for financial recommendations.
Lily Vittayarukskul creates AI tool Waterlily for family finances
Lily Vittayarukskul, a 29-year-old Bay Area woman and Forbes 30 Under 30 honoree, created Waterlily, an AI platform for family financial planning. The tool predicts long-term health care needs, considering factors like healthcare inflation and location. It also shows how family members might provide care and offers product quotes. Vittayarukskul was inspired by her aunt's battle with cancer and the financial strain it caused. Financial planners like Jessica Weaver use Waterlily to help clients secure better coverage and plan for the future.
Caterpillar thrives unexpectedly from the AI boom
Caterpillar Inc. has become an unexpected winner in the AI boom, with its shares reaching record levels and market capitalization growing to 347 billion dollars by February 10. The company, led by CEO Joseph Creed, supplies essential equipment like turbines and generators for AI-driven data centers and infrastructure. Caterpillar's business has expanded beyond construction to include energy and power systems. It reported a record order backlog of 51 billion dollars and expects mid-single-digit revenue growth for 2026. This growth is largely fueled by infrastructure spending in North America.
European shares fall as AI worries hit tech and finance
European shares dropped on Wednesday, February 11, mainly due to concerns that new AI models could reduce profits for traditional software companies. Dassault's shares fell 9.7 percent, and other financial and insurance stocks across Europe also saw declines. Investors are worried about AI disruption spreading across various market sectors. However, some analysts believe the sell-off in software stocks might be an overreaction. Hardware makers like Siemens Energy were favored by investors during this period.
AI startups attract record venture capital funding
In 2025, venture capital funding for AI and machine learning startups jumped by 72 percent, reaching 270.2 billion dollars. This marked the first time AI ventures received more VC money than all other industries combined, making up 52.7 percent of total investments. While the number of overall VC deals decreased, there was a rise in large "megadeals" like Meta's 14.3 billion dollar investment in Scale AI. North America received the largest share of AI funding at 79.3 percent. This trend shows investors are focusing on AI companies with strong business applications and infrastructure.
Kelly Loeffler invests in AI startup before Nvidia deal
Small Business Administration Administrator Kelly Loeffler invested 3 million dollars in the private AI startup Groq in October 2025. Weeks later, in December, Groq secured a 20 billion dollar deal to license its AI technology to Nvidia. This timing has raised "valid suspicions" from ethics watchdogs like Craig Holman. Loeffler's spokesperson stated her investments are independently managed and she follows all ethics rules. This event highlights ongoing concerns about public officials' stock trading, especially given Loeffler's past insider trading investigation during her Senate term.
Financial firms struggle amid AI fears and weak sales
On February 11, investor confidence dropped due to disappointing U.S. retail sales and concerns about AI's impact on financial firms. December's retail sales were flat, missing expectations, which also cast doubt on upcoming jobs reports. Major U.S. stock indexes mostly fell, though the Dow achieved a record close. European shares also declined as worries grew that new AI models could reduce profits for traditional software businesses. In other news, Alphabet plans a new debt sale, and xAI lost its second co-founder in two days.
OpenAI faces challenge to make AI profitable
OpenAI faces a significant challenge in making its artificial intelligence technology profitable. CEO Sam Altman views advertisements as a "last resort" for revenue, fearing they could reduce trust in ChatGPT. Last year, OpenAI spent 5.5 billion dollars on operations while only bringing in 2 billion dollars. The company aims to triple its revenue this year by potentially selling ads and expanding its technology sales to businesses. However, OpenAI has little experience in these areas and must reduce its losses before considering a public stock offering.
Oscar Health stock upgraded by UBS
Oscar Health Inc. (NYSE:OSCR) is gaining attention as a potential AI stock investment. On January 9, UBS upgraded Oscar Health's stock rating from Sell to Neutral and increased its price target from 12 dollars to 17 dollars. This upgrade reflects the belief that Oscar's exchange enrollment numbers are stronger than expected, even after enhanced subsidies ended. The company is seen as an under-the-radar opportunity in the AI sector.
Sources
- Exclusive: Winn Raises $18M Series A For AI-Powered Real-Time Sales Assistant
- Israeli startups announce investments of some $50 million to develop business-focused AI platforms
- Gen Digital (GEN) Accelerates With AI Security and Financial Wellness Solutions
- Gen Digital (GEN) Accelerates With AI Security and Financial Wellness Solutions
- Bay Area woman creates AI tool Waterlily help families' financial planning
- The most unexpected winner of the AI boom? Caterpillar
- Tech stocks drag European shares lower as Dassault results disappoint
- Funding for startup AI companies dominates VC investment arena
- Nvidia Struck a $20 Billion Deal With an AI Startup. Kelly Loeffler Made a Massive Investment Weeks Earlier.
- CNBC Daily Open: Financial firms wobble on AI threats and disappointing U.S. retail sales
- OpenAI’s Biggest Challenge Is Turning Its A.I. Into a Cash Machine
- Is Oscar Health (OSCR) one of the under-the-radar AI stocks to buy?
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