Paradigm to Launch $1.5 B Frontier‑Tech Fund Targeting AI, Robotics and Crypto
San Francisco‑based crypto‑focused venture firm Paradigm is preparing a new multibillion‑dollar vehicle that will broaden its investment mandate to include artificial intelligence, robotics and other emerging technologies. The move, reported by the Wall Street Journal, comes as the firm seeks to raise roughly $1.5 billion for the fund.
Fund scope and structure
Paradigm plans to allocate the capital to a mix of early‑stage and growth‑stage companies operating at the intersection of AI, robotics, and other “frontier” sectors. While the firm will maintain its existing commitment to cryptocurrency projects, the new fund will be managed by Paradigm’s current technical investment team, which will evaluate opportunities across the expanded technology set.
The firm already oversees about $12.7 billion in assets under management, according to its most recent regulatory filings. Its flagship $2.5 billion crypto fund, launched in November 2021, was the largest crypto‑focused vehicle at the time, and an $850 million venture fund devoted to early‑stage crypto projects was publicly announced in 2024.
Why the diversification now?
Sources close to Paradigm say the firm’s leadership decided against a narrow remit that could cause it to miss attractive deals outside the traditional crypto space. “We didn’t want to be boxed in,” one source told the newspaper.
The decision aligns with a growing convergence between blockchain and AI technologies. Use cases such as autonomous AI agents that execute payments, or AI‑driven smart‑contract analysis, illustrate the overlap. Paradigm itself has been experimenting with this cross‑pollination for several years. In 2023, the firm removed Web‑3‑specific language from its website—a move that sparked speculation about a strategic pivot. Co‑founder and managing partner Matt Huang later clarified that the change reflected an exploratory phase rather than an abandonment of crypto, adding that recent developments in AI were “too interesting to ignore.”
In a series of tweets, Huang emphasized that the firm remains “more excited than ever about crypto” and that investing in AI does not represent a zero‑sum competition with its core focus. “Both ecosystems are compelling and will intersect in many ways,” he wrote.
Recent AI‑crypto collaboration
Earlier this month, Paradigm partnered with OpenAI to release EVMbench, a benchmark designed to measure how well various AI models can discover and remediate vulnerabilities in Ethereum smart contracts. The project underscores the firm’s belief that AI tools can augment security and efficiency in decentralized finance.
Market backdrop
The timing of Paradigm’s expansion coincides with a surge in venture capital (VC) activity directed at AI. OECD data project that AI‑related VC allocations will reach $258.7 billion in 2025—about 61 % of all VC spending—doubling the share from just three years earlier. Within that pool, generative‑AI companies are expected to account for roughly 14 % of AI‑focused VC dollars, with U.S. firms attracting the bulk of the capital.
For crypto‑focused venture firms, the trend presents both a risk of capital migration and an opportunity to capture value from emerging hybrid use cases. By positioning itself at the nexus of AI, robotics and blockchain, Paradigm hopes to ride the wave of AI funding while retaining its foothold in crypto innovation.
Key takeaways
- New fund size: Paradigm aims to raise $1.5 billion for a frontier‑tech vehicle covering AI, robotics, and related sectors.
- Continued crypto focus: The firm will still allocate capital to crypto projects, leveraging its existing technical team for both domains.
- Strategic flexibility: Leadership wants to avoid restrictive mandates that could preclude high‑potential deals outside the traditional crypto sphere.
- Overlap potential: AI agents capable of autonomous transactions and AI‑driven security tools illustrate the synergies between the two ecosystems.
- Market timing: With AI VC investment projected to dominate venture capital flows by 2025, Paradigm’s move aligns its portfolio with the broader capital trend while preserving its crypto expertise.
- Signal to the industry: The initiative may prompt other crypto‑centric funds to consider broader technology mandates, potentially reshaping the venture landscape in both sectors.
Paradigm’s upcoming fund reflects a calculated bet that the future of digital innovation will be a blend of decentralized finance and intelligent automation. Whether the firm can successfully navigate both worlds remains an open question, but the capital raise will be a barometer for investor appetite for a hybrid investment thesis.
Source: https://cointelegraph.com/news/crypto-vc-paradigm-invest-ai-robotics-frontier-tech?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
