Venture capitalists (VCs) are revolutionizing their investment approach in 2025, deploying a bold 'kingmaking' strategy to identify and crown the next big winners in artificial intelligence (AI) at their earliest stages.
This aggressive tactic, recently highlighted by TechCrunch, involves pouring unprecedented sums into nascent AI startups to give them a decisive edge over competitors, often before they’ve even proven their market fit.
The Rise of Kingmaking in AI Investments
Unlike traditional VC models that spread risk across multiple ventures, this strategy focuses on creating category leaders by providing massive funding rounds to a select few, ensuring they dominate their niche from the outset.
Historically, VCs have used large investments to spur growth in promising sectors, but the current frenzy around AI marks a new extreme, with billions flowing into startups that are sometimes just ideas on paper.
The impact of this approach is already visible, as early-stage AI firms backed by such funds are rapidly scaling, acquiring talent, and securing partnerships that smaller competitors can only dream of.
Why AI? The High-Stakes Bet on Future Tech
AI’s potential to transform industries—from healthcare to finance—has made it the hottest investment frontier, with VCs betting that today’s tiny startups could become tomorrow’s trillion-dollar titans.
Looking back, the generative AI boom of 2023 set the stage for this trend, as firms that received early backing surged ahead, leaving latecomers struggling to catch up.
The future implications are staggering: if successful, this kingmaking could consolidate AI innovation in the hands of a few heavily-funded players, potentially stifling diversity in the tech ecosystem.
Critics warn that this high-risk strategy might inflate a bubble in AI investments, reminiscent of the dot-com era, where overzealous funding led to spectacular crashes.
Yet, proponents argue that the transformative power of AI justifies the gamble, pointing to early successes where kingmade startups have already disrupted traditional business models.
As we move deeper into 2025, the tech world watches closely to see if this VC strategy will create lasting giants or merely temporary hype, shaping the trajectory of AI for decades to come.
Andrew Lee
