After two years of relatively muted investment activity, it looks like VCs are once again pouring capital into startups at pandemic-level levels. But a closer look shows that they really aren’t.

In the fourth quarter of last year, investors funneled $74.6 billion into US startups, a huge increase from the average of $42 billion invested in each of the previous nine quarters, according to PitchBook data was released on Tuesday.

While these funding levels were only seen during the peak of the ZIRP period (end of 2020 to 2021), the reality is that this recent increase in venture capital funding has disproportionately benefited a select few. that company. In fact, $32 billion, or 43.2% of investment activity in Q4, was invested in precisely a few very large deals:

Databricks: In December, the data analytics company raised $10 billion at a $62 billion valuation.

OpenAI: Secured by the creator of ChatGPT $6.6 billion at a $157 billion valuation in early October.

xAI: Elon Musk’s xAI developed a generative AI foundational model called Grok, which landed $6 billion from December investors.

Waymo: The self-driving car developer that operates robotaxi services in San Francisco, Los Angeles, and Phoenix has acquired a $5.6 billion Series C in November led by parent company Alphabet and joined by a who’s who of Silicon Valley venture firms.

Anthropogenic: In November, the generative AI model developer was raised $4 billion from Amazon.

Without these megadeals, investment activity in Q4 could mirror the previous two-year average of $42 billion. This strong concentration of venture capital investment highlights the growing gap between a few well-funded companies and the broader startup ecosystem.

Whether 2025 will see a continuation of the high level of venture capital investment observed in Q4 last year remains to be seen. However, most venture capital funding will likely continue to flow towards a small group of the most promising AI companies.