AI startups are eating the venture industry and the returns, so far, are good

AI startups have surged in venture capital funding, capturing 41% of the total $128 billion raised last year, with major players like OpenAI and Anthropic leading the charge. OpenAI's recent $110 billion funding round positions it closer to a $1 trillion valuation, reflecting a significant trend where a small number of startups are attracting the majority of investment. This bifurcated venture landscape indicates a promising internal rate of return for newer funds, particularly those focused on AI, as they navigate a market increasingly dominated by a select few.