Which US States Attract the Most AI Startup Funding?
The AI Funding Race Across US States
The United States continues to lead the global AI industry. In 2025, US-based AI startups raised $159 billion, which represented about 79% of all AI startup funding worldwide.
While the country leads overall, funding is heavily concentrated in a few states that have strong AI talent, research, infrastructure, and investors.
California Remains the Clear Leader
California continues to dominate AI funding despite years of discussion about companies leaving the state. It attracted 62% of all US AI venture funding.
The San Francisco Bay Area remains the center of the AI industry, with companies such as OpenAI, xAI, Anthropic, Safe SuperIntelligence, and Scale AI raising more than $15 billion in a single year. California’s advantage comes from its experienced talent pool, established startup ecosystem, and access to the computing infrastructure needed to build large AI models.
New York Is Growing While Massachusetts Slows
Massachusetts remains an important AI hub, especially for research, healthcare, and biotechnology. However, it raised just over $10.7 billion, slightly lower than previous years as fewer large generative AI companies emerged from the state.
New York, on the other hand, continues to attract more investment. Growth has been supported by AI companies serving financial services, cybersecurity, and enterprise software. Large funding rounds, including Wiz’s $1 billion investment, have helped strengthen the state’s position.
Other States Are Building AI Infrastructure
Several other states are becoming important players in the AI ecosystem. New Jersey recorded 37% year over year funding growth, largely driven by CoreWeave’s $1.1 billion Series C.
Texas raised more than $6 billion, supported by investments in AI infrastructure, energy technology, and new data center projects. Washington also attracted more than $2.5 billion, with many companies focused on cloud computing, enterprise software, and cybersecurity.
As AI expands beyond foundation models into industry specific applications, investment is expected to spread across more states. Cities with strong research universities, reliable energy, modern data centers, and skilled talent are likely to attract a larger share of future AI funding.
