Crypto VC Paradigm launches $1.2 billion AI fund as it broadens beyond digital assets

Paradigm has raised $1.2 billion for a new venture fund focused on artificial intelligence and robotics, according to a Wednesday report from Bloomberg.

The firm's third venture fund reflects growing interest in AI and defense technology, though it does not signal an exit from digital assets.

"Crypto was the first frontier for us, and it continues to be a really exciting one, but there's so much else happening right now that's pretty hard to ignore," managing partner Alana Palmedo told Bloomberg.

Paradigm has already deployed capital from the new fund into several companies, Bloomberg reported. Those include autonomous drone delivery company Zipline International, which was valued at $7.6 billion in January, and space defense startup True Anomaly, which reached a $2.2 billion valuation in April.

Founded in 2018 by Matt Huang and Coinbase co-founder Fred Ehrsam, Paradigm built its reputation as one of crypto's largest venture investors. The firm launched a $2.5 billion flagship crypto fund in November 2021, then the largest dedicated crypto fund, before raising an $850 million fund for early-stage blockchain startups in 2024.

Paradigm's interest in AI predates its latest fund. In a June 2023 post on X , co-founder Matt Huang said the firm had "never been more dedicated to crypto" while also acknowledging that advances in artificial intelligence were "too interesting to ignore."

Huang rejected the idea that crypto and AI compete with each other, writing that the firm did not view them as "a zero-sum competition" and expected "plenty of overlap" between the two technologies. At the time, Huang said Paradigm would continue investing across all stages of the crypto market while exploring AI as part of its broader research-driven investment strategy.

Stablecoin market cap fell to $312B in June, its largest monthly drop since TerraUSD, while tokenized equity volumes surged 145% to a record $3.86B.

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