The top 5 venture capital firms investing in AI

Artificial intelligence (AI) and machine learning deals stood out in an otherwise sluggish venture capital market in 2024, capturing 46.4% of US venture capital funding, up from 36.0% the previous year. 

There was ample AI investment in foundation model, infrastructure, and data provisioning companies—and a slew of mega funding deals for AI companies, like OpenAI’s $6.6 billion raise in October and xAI’s $6 billion raise in May 2024. 

While the full extent of AI’s capabilities and potential impact remains unclear, the best VCs are already adjusting their dealmaking strategies to stay competitive. 

This article highlights the top five venture capital firms that invest in AI, based on PitchBook’s ranking of VC investors who have participated in the most generative AI deals. 

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1. Sequoia Capital

Headquartered in Menlo Park, California, Sequoia Capital is one of the most prestigious and influential venture capital firms in the world. Since its founding in 1972, Sequoia has backed some of the biggest tech success stories, like Apple, Google, and Cisco. They invest in finance, energy, healthcare, deep tech, e-commerce, and internet companies.

With 2,000+ portfolio companies, 400+ exits, and a track record of investing in transformative startups, Sequoia’s AI portfolio includes prominent names such as OpenAI, Notion, Nvidia, and Harvey. They invest in seed stage, early stage venture, and late stage venture companies, and their typical first funding round is series A. 

Sequoia Capital’s approach to AI is rooted in the belief that AI will be transformative across industries and business models. As David Cahn, Partner at Sequoia Capital, shares in an AI outlook for 2025: 

“AI’s potential is now congealing into something real and tangible—embodied by physical data centers that are rising up all across America… If 2024 was about new ideas abounding, 2025 will be about sifting through those ideas to see which really work.”

2. Andreessen Horowitz (a16z)

Founded by Marc Andreessen and Ben Horowitz in 2009, Andreessen Horowitz (a16z) has built a reputation as a venture capital powerhouse by investing in companies that reshape industries. With more than 1,600 portfolio companies, including high-profile names like Facebook and Airbnb, Andreessen Horowitz is no stranger to identifying the next big company.

Focused on bold, forward-thinking investments, Andreessen Horowitz has quickly become a key player in the AI space. Its AI portfolio features groundbreaking technology companies such as OpenAI, Hippocratic AI, and Databricks all pushing the boundaries of what’s possible with artificial intelligence.

In the firm’s Techno-Optimist Manifesto, Andreessen writes: 

“We believe Artificial Intelligence is our alchemy, our Philosopher’s Stone – we are literally making sand think. We believe Artificial Intelligence is best thought of as a universal problem solver. And we have a lot of problems to solve. We believe Artificial Intelligence can save lives – if we let it.”

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3. Pioneer Fund

Pioneer Fund has carved out a unique niche in venture capital by focusing on startups from Y Combinator. Since its founding in 2017, the San Francisco and Toronto-based VC has become a key player in identifying and nurturing transformative startups, particularly in the AI ecosystem. They focus heavily on pre-seed companies. 

Pioneer Fund’s AI portfolio includes tech companies such as Hamming AI, Cofactr, and EzDubs. By backing startups early and using its network of 470+ Y Combinator alumni, Pioneer Fund ensures that emerging AI startups receive the hands-on support, resources, and mentorship they need to thrive.

The firm has a dedicated machine learning and AI fund, which they describe as follows: 

“We invest at the earliest stages in founders at the bleeding edge of AI, LLMs, and Machine Learning. Pioneer AI + ML Fund is run by technical founders who have built successful AI-powered companies. We are engineers and computer scientists who have been through all stages of startup & scaleup.”

4. Soma Capital 

Soma Capital has quickly established itself as a prominent venture capital firm since it was founded in 2015 by Aneel Ranadive. With a focus on supporting visionary entrepreneurs across the globe, Soma has invested early in hundreds of startups, including 20+ unicorns. 

Soma Capital’s portfolio features innovative technology startups such as Deel, Rippling, Razorpay, and Cruise. In the AI space, they have invested in Ramp, Cognition Labs, Ironclad, and Mercor. By prioritizing early-stage investments, Soma Capital positions itself as a key partner for startups shaping the future of artificial intelligence.

 Soma Capital emphasizes its commitment to investing in transformative companies:

"Soma Capital invests in brilliant, fearless teams building generational companies. We've now seeded +20 unicorns.”

5. Khosla Ventures

Founded in 2004 by Sun Microsystems co-founder Vinod Khosla, Khosla Ventures is headquartered in Menlo Park, California, and is widely recognized for its bold investments in cutting-edge technologies. 

With a focus on transformative innovation, the firm has backed startups across a diverse range of industries, including fintech, cybersecurity, robotics, biotech, life sciences, MedTech & diagnostics, digital health, therapeutics, and sustainability. 

Khosla Ventures’ AI portfolio includes OpenAI, Analog Inference, and Curai Health. By prioritizing early-stage companies with groundbreaking AI technologies, the firm plays a pivotal role in shaping the future of AI-driven industries.

Khosla describes his AI outlook: 

“AI is a powerful tool which, like any previous powerful technology tool like nuclear or biotechnology, can be used for good or bad. It is imperative that we choose carefully and use it to construct that ‘possible’ world guided by societal choices. That we not forsake the benefits out of fear of the unknown. I am a technology possibilist, a techno-optimist, but for technology used with care and caring.”

Using AI to gain an edge in VC dealmaking

The top VC firms aren’t just investing in AI companies, they’re integrating AI tools into their investment processes to drive efficiency and make more data-driven decisions.

Our survey of nearly 300 private capital dealmakers revealed that more venture capitalists are using AI to automate daily tasks and research companies for deal sourcing—with 76% and 62% of respondents doing so today, up from 62% and 55% in 2024, respectively. 

This shift frees up valuable time for venture firms and AI investors to focus on what matters most in the industry: building relationships and closing the next big deal.

To learn more about how AI is transforming VC and how to effectively integrate it, check out our guide, How AI will transform dealmaking. You’ll discover:

• Which AI trends are shaping the industry
• Ways to think about applying AI in private capital
• How Affinity is pioneering AI-driven dealmaking workflows

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