Crypto VCs shift billions to AI and robotics, retreating from tokens
In brief
- Paradigm closed $1.2B fund with mandates for AI, robotics, and frontier tech beyond crypto.
- Crypto VCs including a16z and Founders Fund accelerate capital deployment into autonomous systems and physical products.
- Robotics valuations may spike as major crypto firms enter, driving up early-stage round sizes.
- Paradigm's latest robotics and AI bets are traditional equity plays with no direct token exposure.
The mandate has changed
Paradigm's fund mandate expanded to include AI, robotics, and what the industry calls "frontier technologies." The firm originally targeted a raise of up to $1.5 billion for this vehicle. It has already deployed capital into companies like Zipline, the logistics robotics company known for autonomous drone delivery systems.
The pattern extends beyond Paradigm. Andreessen Horowitz and Founders Fund have been funneling capital into AI and robotics startups at an accelerating pace. In 2024 and 2025, AI and blockchain-adjacent projects were securing tens of millions in funding from these firms and their peers. By mid-2026, the scale has jumped to billion-dollar fund vehicles with explicit mandates covering both digital and physical automation.
Tokens are not the play
Notably, no specific crypto tokens have been directly tied to the robotics and AI projects that Paradigm is funding with its latest vehicle. These investments appear to be traditional equity plays in companies building physical products and AI systems, not token-based projects.
This represents a genuine departure for firms built on backing blockchain protocols. The shift isn't ideological—it's capital-driven. When a16z, Paradigm, and Founders Fund are all hunting in the same territory, startup valuations in the sector will likely inflate. Early-stage investors who got into robotics companies before the crypto VC migration may find themselves sitting on positions that have appreciated considerably as new entrants drive up round sizes.
The crypto venture world isn't abandoning digital assets. It's expanding into the physical world.
