#ParadigmRaises1.2BToBetOnAI

Paradigm, one of crypto's most prominent venture capital firms, has closed a $1.2 billion fund aimed squarely at expanding beyond digital assets into AI, robotics, and other frontier technology. It's the firm's fourth overall fund and third venture-focused vehicle, following a $2.5 billion crypto fund raised in 2021 and an $850 million early-stage crypto fund in 2024.

Founded in 2018 by Matt Huang, a former Sequoia Capital partner, and Coinbase co-founder Fred Ehrsam, Paradigm has built its reputation as one of the more technically hands-on crypto investors, often working directly with founders on protocol design rather than just writing checks. The firm now manages close to $12 billion in assets. Managing partner Alana Palmedo framed the shift plainly, telling Bloomberg that crypto was the firm's first frontier and remains an exciting one, but that there's simply too much happening elsewhere right now to ignore.

The fund has already been deploying capital well before this announcement. Paradigm backed autonomous drone delivery company Zipline International, valued at $7.6 billion in January, through a Series H round in March, and joined a Series D round for space defense startup True Anomaly, valued at $2.2 billion, in April. Both sit entirely outside crypto. The firm has also highlighted robotic manufacturing platform SendCutSend and AI research company Nous Research, maker of the open-source Hermes Agent model, among its non-crypto bets.

Importantly, this isn't a retreat from crypto, Paradigm has been explicit that it's still actively investing in the sector, co-leading a $175 million round in DeFi lending protocol Morpho this past June and leading a seed round in July for M1X Global, a company building infrastructure for tokenized US Treasuries. The firm also continues backing Hyperliquid, the perpetuals exchange, and Kalshi, the prediction markets platform, and pointed to Tempo, a stablecoin-focused blockchain it co-founded with Stripe, as part of its ongoing crypto commitment.

The broader context here is genuinely stark. Global venture funding hit a record $510 billion in the first half of 2026, already surpassing all of last year's total, and AI companies captured the overwhelming majority of it, with OpenAI and Anthropic alone accounting for more than 40 percent of first-half funding. Crypto, by contrast, pulled in just $10.8 billion over the same period. Bitcoin itself is down nearly 30 percent this year. Paradigm isn't alone in reading this shift, crypto venture firm Haun Ventures raised $1 billion in May with its own first expansion into AI, and Framework Ventures has reportedly broadened its mandate similarly.

For anyone tracking crypto-adjacent venture activity or the broader AI infrastructure theme on Gate, the signal here is less about Paradigm abandoning digital assets and more about what it says regarding where growth capital currently sees the largest opportunity set. Even a firm built entirely on crypto conviction, with deep technical roots in the space, is concluding that a $1.2 billion fund needs exposure well beyond blockchain alone to find enough opportunity, which says as much about the current state of crypto venture deal flow as it does about AI's pull.