Here are the types of AI companies venture capitalists will want to back in 2025
The AI startup market is sprawling, from companies looking to develop new chips, to those using AI to build robots, to other companies looking to use AI to create specialized solutions for industry-specific workflows. There are a lot of potential areas that venture capitalists can invest in, but there are clearly a few sub-sectors that they are more interested in than others.
TechCrunch recently Surveyed 20 venture capitalists who invest in startups looking to sell to institutions on their predictions for 2025.
Mark Rostek, vice president and senior managing director at Intel Capital, told TechCrunch that now that the big foundational models have been established — at least in his opinion — the next interesting area to invest in is AI solutions for specific tasks.
“I find models that excel at specific functions particularly interesting, especially when combined with clients built on top of them,” Rostic said. “As AI adoption accelerates, application-focused companies will take center stage, as CEOs increasingly look for ways to leverage AI in specific areas that deliver tangible, transformative impact.”
This was echoed by Mike Hayes, managing director at Insight Partners. He added that he will look to support companies that build products that use artificial intelligence to reduce trade friction.
“I look for solutions that solve organizations’ unique and cross-cutting challenges — areas where traditional solutions have failed,” Hayes said. “This includes vertical and personalized workflows reimagined with GenAI or agent automation and security innovations that not only identify and alert, but remediate as well.”
Venture capitalists interested in going after companies targeting specific enterprise use cases will need to ensure that these startup solutions are actually businesses, not just features. Otherwise, we could see a repeat of the SaaS boom in 2021, when a lot of companies that were really just one-note features raised large amounts of venture capital before It is left behind To the benefit of companies that introduced platform solutions when enterprise budgets shrink in 2023.
There are, of course, tasks important enough to warrant a single-feature solution. For SaaS, we’ve heard overwhelmingly that companies will continue to pay for companies that offer specific cybersecurity solutions. As for AI, it is not yet clear what solutions companies will be willing to pay for. Ed Sim, founder and general partner at Boldstart Ventures, acknowledges this challenge.
“The trick is to skate to where the puck is going to be and also think about whether this is a feature, a product or a business,” Sim said.
Another area of interest to venture capitalists is reliability and flexibility. Jason Mendel, an investor at Battery Ventures, said he is looking to invest in companies in the monitoring and reliability space. Liran Greenberg, co-founder and managing partner at Team8, also has his eye on what he calls “enterprise agility.”
“The Crowdstrike update incident showed how fragile our digital world is, not only to cyber attackers but also to bugs,” Greenberg said. “We need digital infrastructure that is more resilient and anti-fragile by design.”
AI infrastructure will also remain a hot area for investment in 2025. Venture capitalists noted that with the progress being made regarding AI agents, they are looking at the infrastructure needed for organizations to adopt the technology as well as companies that can help figure out the pricing for AI agents. also. .
“It’s still very early stages here, and I believe the momentum for AI infrastructure will continue into 2025, particularly as agentic frameworks proliferate, new paradigm paradigms (including heuristics) evolve, advanced AI advances, and the UI/UX of applications evolves.” Artificial intelligence (including the use of computers),” said Janelle Teng, a vice president at Bessemer Venture Partners.
