Less Regulation Could Mean Opportunities As AI Stays On Top
Venture Preview Part 2: Less Regulation Could Mean Opportunities As AI Stays On Top
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While optimism abounds in the venture capital world for 2025, fueled by the potential for a rebound in IPOs and M&A activity, other factors are poised to significantly shape the funding landscape. Decreased regulation in sectors like crypto and the continued fervor surrounding artificial intelligence are likely to be major drivers.
AI Remains King
Despite some uncertainty surrounding President-elect Donald Trump’s second term, one thing is clear: AI will continue to dominate VC investment.
Experts predict the pace of AI investment will remain strong in 2025 as the technology matures and addresses key pain points like streamlining workflows and automating coding.
“I could see agentic AI advancing — possibly flipping the SaaS model around and becoming more outcome-based,” says Yash Patel, general partner at Titanium Ventures.He envisions AI-enhanced platforms, like those in construction contracting, moving away from subscription models and rather being paid based on the number of contracts successfully completed.
Industries like defense, environmental technology (agtech), and data-heavy sectors like healthcare are ripe for disruption by AI.Investors will continue to watch companies like NetSuite and Salesforce, which possess massive datasets crucial for AI advancement in specific industries. This data trove could further solidify the dominance of these already large players.
“AI is not going anywhere,” asserts Don Butler, managing director at Thomvest Ventures. “You are seeing more reasonable valuations from startups — except for AI.”
Less Regulation,More Prospect
Venture investors anticipate that less regulation under the new administration will benefit several industries,with AI and crypto being prime examples.
Bitcoin experienced a surge after Trump’s victory,surpassing $100,000. While the market’s ceiling remains unclear, this surge will undoubtedly reignite interest in Web3.
“You’ll see bigger companies get more engaged with Web3,” Patel predicts.
In December, Trump appointed former PayPal executive David Sacks as his crypto and artificial intelligence czar.Sacks, a co-founder of Craft Ventures and a vocal critic of regulation, has deep ties to the VC industry.
However, some sectors may face headwinds under the new administration.Clean energy and electric vehicles are likely to be among the hardest hit.
Despite these potential challenges, VCs, advisors, and industry insiders remain cautiously optimistic about the year ahead.
“The venture ecosystem will be in a better spot next year than in 2024,” Patel concludes.
Illustration: Dom Guzman
The VC Landscape in 2025: AI, Deregulation and the Rise of Web3
NewsDirectory3: Yash Patel, general Partner at Titanium Ventures, joins us today to discuss the venture capital landscape in 2025. Welcome, Yash.
Yash Patel: Thanks for having me.
NewsDirectory3: Let’s dive right in. Despite some uncertainty surrounding the new administration, one thing seems clear: AI will continue to dominate VC investment. What are your thoughts on this trend?
Yash Patel: Absolutely. I could see agentic AI advancing — possibly flipping the SaaS model around and becoming more outcome-based. Imagine AI-enhanced platforms, like those in construction contracting, moving away from subscription models and rather being paid based on the number of contracts successfully completed.
NewsDirectory3: That’s an interesting concept. What industries do you see as ripe for disruption by AI?
Yash Patel: Industries like defense, environmental technology (agtech), and data-heavy sectors like healthcare are all ripe for disruption. Investors will continue to watch companies like NetSuite and Salesforce, which possess massive datasets crucial for AI advancement in specific industries.
NewsDirectory3: You mentioned outcome-based models. Do you think we’ll see this shift across various AI applications?
Yash Patel: Yes, I do. As AI matures and delivers demonstrable results, the focus will naturally shift to paying for outcomes rather than just access to the technology.
NewsDirectory3: Along with AI, less regulation under the new administration is expected to benefit several industries, notably in AI and crypto.
Yash Patel: Exactly. We already saw Bitcoin surge past $100,000 after the election. While the market’s ceiling remains unclear, this surge undoubtedly reignites interest in Web3. You’ll see bigger companies get more engaged with Web3 consequently.
NewsDirectory3: Do you foresee any potential challenges with this deregulation in certain sectors?
Yash Patel: Yes, some sectors like clean energy and electric vehicles might face headwinds under the new administration.
NewsDirectory3: how optimistic are you about the venture ecosystem in 2025?
Yash Patel: Cautiously optimistic. The venture ecosystem will be in a better spot next year than in 2024.
NewsDirectory3: Yash Patel, General Partner at Titanium ventures, thank you for your insights into the illuminating future of venture capital in 2025.
Yash Patel: My pleasure.