Venture capital activity is booming, according to a recent report. Q1 2026 saw the most venture investment ever, largely driven by the hot artificial intelligence (AI) sector.

In fact, VC investments in Q1 have already generated almost 70% of all VC spending in 2025.

Crunchbase news states that VC funding nearly hit $300 billion, an all-time high. At the same time, four of the five largest VC investments took place, providing capital for OpenAI at $120 billion, Anthropic at $50 billion, xAI at $20 billion, and Waymo at $16 billion. These investments totaled $186 billion, or 64% of the quarter’s total.

When you look at geography, it should come as no surprise that the US-based firms captured 83% of global venture capital during the quarter.

In second place was China at a distant $16.1 billion, and then the UK at $7.4 billion. While China is a huge country by population, the UK has a population of about 70 million, making it the 5th largest in the US.

So why does the US invest so much risk capital in promising private firms?

A portion concerns culture, as the US has a well-entrenched equity culture that is more active than in other countries. Also, entrepreneurs who hit it big do not bury their gains in their backyard; they put them to work by investing the funds, frequently in other early-stage ventures, creating a cycle of innovation and wealth creation.

Additionally, there are important systemic differences, such as taxes, which tend to be lower in the US.

An innovation-driven economy should be the goal of all policymakers everywhere, yet too frequently this ambition is lost in the cacophony of political posturing about taking money from the successful to distribute to others and provide more public services. While there is merit in discussing support for public services, private money will always trump public expenditures in terms of efficiency, thereby driving more economic activity and prosperity, which benefits everyone.