AI Climate Tech VC Investment Hits Record Value Amidst Fewer Deals

AI climate tech VC investment reached its highest-ever deal value last year, according to PitchBook research. This occurred despite a general decline in the number of overall climate tech deals. The trend highlights a notable contrast between increasing deal value and decreasing deal count. AI’s role in driving clean energy venture capital is becoming increasingly significant.

What Happened

Total AI climate tech deal value was the highest it’s ever been. However, the number of VC investment deals specifically in AI startups declined last year. For climate tech startups overall, the number of deals fell to a half-decade low in 2025.

Overall climate tech venture capital deal value worldwide was $42.2 billion last year. This figure was roughly flat compared to $42.8 billion recorded in 2024. The total number of climate tech deals dropped from 2,906 in 2024 to 2,130 last year.

Details From Sources

PitchBook research attributes these findings on climate tech deal values and counts. Investors show eagerness for startups utilizing AI to monitor real-time energy production and consumer consumption. Interest extends to AI startups focused on monitoring land vulnerable to climate change. Additionally, AI-focused climate tech entrepreneurs are developing high-efficiency cooling technologies. These are applicable to AI data centers and broader energy production.

John MacDonagh, a PitchBook senior analyst for emerging technology, stated that nuclear and geothermal technologies are “most well-regarded by the current bigwigs” among lower-carbon technologies. PitchBook also reported strong investor interest in US startups specializing in nuclear and geothermal technologies. Venture capitalists are making more concentrated bets on fewer climate tech startups due to flux in US energy policy. Investors are funding AI climate tech startups that can reduce energy production costs across various power sources. PitchBook’s analysis examines the rising concentration in US venture capital.

Why This Matters

This trend signals a shift toward a more concentrated venture market. In this market, fewer companies and funds dominate dealmaking. AI’s growing role as a crucial technology for cost reduction and efficiency in the broader clean energy sector is highlighted. Investor focus is narrowing to specific, high-impact AI applications within climate tech.

Background Context

This investment trend coincided with a period where other clean energy sources, specifically wind and solar, fell out of favor. This occurred during the first year of President Donald Trump’s second term. Overall energy demand in the US has increased due to booming AI data site construction. This rise in demand has begun to strain power grids reliant on legacy fuel sources.

Related Data or Statistics

• Climate tech VC deals worldwide last year (2025): $42.2 billion.
• Climate tech VC deals worldwide in 2024: $42.8 billion.
• Number of climate tech deals last year (2025): 2,130.
• Number of climate tech deals in 2024: 2,906.

Future Implications (SPECULATIVE)

Continued concentrated investments in AI-driven climate tech solutions are possible. AI may increasingly influence energy production and consumption efficiencies. Sustained or increased interest in nuclear and geothermal technologies as “well-regarded” lower-carbon options is a hypothesis. Rising energy demand from AI data centers will likely continue to spur innovation and investment in efficient energy solutions.

Conclusion

AI climate tech VC investment is driving significant deal value in the clean energy sector. This is occurring despite a decrease in overall deal numbers. AI’s strategic importance in addressing climate challenges and shaping the future of venture capital in clean energy is clear.

FAQ

Q1: What is the current trend in AI climate tech VC investment?

A1: According to PitchBook research, total AI climate tech deal value was the highest it’s ever been last year, even though the number of deals declined.

Q2: How have overall climate tech VC deals changed recently?

A2: The number of deals for climate tech startups fell to a half-decade low in 2025. Overall deal value was $42.2 billion worldwide last year, which was roughly flat compared to $42.8 billion in 2024.

Q3: What types of AI climate tech startups are attracting investor interest?

A3: Investors are particularly interested in startups using AI to monitor real-time energy production and consumer consumption. Additionally, AI startups monitoring land vulnerable to climate change and those developing high-efficiency cooling technologies are attracting attention.

Q4: Which lower-carbon technologies are seeing strong investor interest in the US?

A4: John MacDonagh, a PitchBook senior analyst, indicated that nuclear and geothermal technologies are “most well-regarded” and are attracting strong investor interest in the US.

Q5: What factors are influencing current climate tech investment trends?

A5: US energy policy remains in flux, leading venture capitalists to make concentrated bets on fewer climate tech startups. There’s a focus on AI climate tech that can cut energy production costs, partly influenced by increased energy demand from AI data centers straining power grids.

Explore More

Explore more PitchBook news and research on climate tech trends and venture capital.