Artificial intelligence has overtaken all other sectors in the European venture landscape, accounting for more than half of the continent's total funding in the first quarter of 2026.
According to Crunchbase data, European venture funding reached $17.6 billion in Q1, marking a nearly 30% increase year over year. This represents the second consecutive quarter of growth for the region.
While total capital rose, the number of deals dropped significantly. Deal volume plummeted 40% year over year as investors concentrated large sums into fewer, high-impact companies.
AI dominance drives late-stage growth
AI startups captured $9.2 billion in Q1, the highest proportion of total regional funding on record. This surge was fueled by massive late-stage rounds in AI infrastructure and frontier labs.
Four AI-related companies alone secured more than $1 billion each during the quarter. These included data center builder Nscale, autonomous driving developer Wayve, and physical AI lab Advanced Machine Intelligence.
France emerged as a primary hub for frontier AI development. The Paris-based startup Advanced Machine Intelligence, founded by former Meta AI chief Yann LeCun, secured $1 billion in what Crunchbase identified as the largest seed funding round on the continent.
Late-stage funding across the region nearly doubled compared to the previous year. Total late-stage investment hit $9.2 billion across 83 deals, a 91% increase year over year.
In contrast, early-stage and seed-stage deal volumes saw sharp declines. Seed-stage deal volume fell 44%, and early-stage volume dropped 30%.
Despite the drop in deal count, seed-stage funding totals actually rose 50% year over year to $3.1 billion. This growth was largely attributed to the single $1 billion injection into Advanced Machine Intelligence.
Geographically, the UK and France led the recovery, raising $7.4 billion and $2.9 billion respectively. Germany's startup funding remained flat year over year at $1.9 billion.