Family offices and private wealth are increasingly bypassing traditional venture capital firms to make direct investments into artificial intelligence startups, a trend highlighted by 41 such deals reported in February.

Private wealth managers are increasingly investing directly in early-stage AI, moving into riskier investment stages traditionally dominated by institutional venture funds. This provides AI innovators with new capital sources and challenges VCs' role as primary gatekeepers to high-growth tech. The result is a more competitive funding environment for promising AI companies.

What We Know So Far

  • Family offices are increasingly investing directly in AI startups rather than through traditional venture capital funds, according to reports from TechCrunch and Mezha.
  • In February, family offices completed 41 direct investments into startups, with the vast majority of these deals tied to the artificial intelligence sector.
  • As a prominent example, Arena Private Wealth co-led a $230 million funding round for AI chip manufacturer Positron, a deal that also secured the firm a board seat.
  • Research from BNY Wealth indicates that 83% of family offices identify AI as a top strategic priority over the next five years.
  • The same BNY Wealth study found that more half of the family offices surveyed already have investment exposure to artificial intelligence.