Benchmark’s new fund reflects 73 percent of AI financing in large deals, breaking early-investment rules

The US venture capital firm Benchmark carried out one of the biggest shifts in its historic business model based on early, intensive investing, by raising about two billion dollars split between its main fund of $750 million and a new growth fund of $1.25 billion. This change reflects a deep transformation in the global financing structure that AI has rapidly reshaped, as the traditional financing approach is no longer sufficient to meet the new market demands.

Data from the Organisation for Economic Co-operation and Development (OECD) reveal the scale of this concentration, showing that AI companies captured 61 percent of total global venture capital investment in 2025, equivalent to $258.7 billion of $427.1 billion invested worldwide. However, that liquidity was not distributed evenly; deals exceeding $100 million accounted for roughly 73 percent of the total AI investment value. This situation puts entrepreneurs in a complex paradox: cash is abundant overall, but investors' conviction is scarce and confined to a very small number of companies that they believe can lead their entire market segments.

Erosion of software immunity and crowded application layerThey pose decisive questions about the future of startups, because founders can now build products at unprecedented speed thanks to automated tools, making software launch itself no longer a benchmark for investment appeal. Senior investors wonder whether the next billion-dollar company will emerge from the crowded application layer, or whether true immunity is now confined to infrastructure, core models, proprietary data, or distribution networks. The Benchmark team, which includes Jack Altman, Peter Venton, Chitan Botagonta, Everett Randall, and Eric Fischera, reflects this divergence, bringing a mix of expertise in company founding, project-software support, and infrastructure investments in models such as Anthropic, Cerebras Systems, and Fireworks AI.

The investment experience in the AI chip company Cerebras Systems illustrates the nature of these bets that diverge from the prevailing consensus, as partner Eric Fischera initially hesitated in 2016 in arranging the first meeting with the company because the computing hardware fell outside his fund’s usual investment scope, and the project seemed extremely difficult. However, that hesitation turned during the pitch into an investment decision that led Benchmark to lead the first Series A financing round of $25 million, continuing to the company's public offering with the fund retaining a 9.5 percent stake at the IPO, confirming that the most sustainable opportunities rarely appear as clear or universally accepted deals from the outset.

What does this concentration mean for tech companies in the Gulf, Egypt, and the Arab Levant?As a follower of capital flows, I see that the 73 percent concentration of AI funding in massive deals exceeding $100 million sends a direct message to founders in our region: the race is no longer about sheer speed in developing APIs or repackaging ready-made global models, because that path has become crowded and extremely fragile. If you are building a startup in Riyadh, Dubai, or Cairo, your primary step to attract capital requires constructing structural defenses that cannot be easily replicated, specifically by controlling local data unavailable to competitors, integrating deeply into supply chains and operating systems of large corporations, or owning a complex local distribution network that is hard to breach.

The reshaping of major funds’ investment books confirms that global capital is gradually moving away from superficial consumer bets and toward supporting entrenched tech assets. The challenge for startups is no longer to prove programming ability or launch an interactive interface, but to demonstrate economic viability and a model’s ability to survive in an investment environment that applies the highest levels of scrutiny and selection.