Paradigm launches $1.2 billion AI fund, moves beyond digital assets

Top crypto VC firm, Paradigm, has finalized a $1.2 billion fund to back AI and robotics startups. This will be the very first time the venture firm will move beyond digital assets since it launched in 2018.

The firm stated that the move does not mean it has ceased its crypto operations, however, it shows investors where the industry’s biggest checkbooks are currently facing.

The AI fund arrives as money floods into AI while crypto activities reduce, with fewer rounds absorbing most of the capital.

“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 already spending  AI fund

Two of Paradigm’s early interests using the new fund are companies totally away from crypto. They include Zipline International, an autonomous drone delivery company reportedly valued at $7.6 billion in January, and True Anomaly, a space defense startup that hit a $2.2 billion valuation in April.

The Zipline investment came through a Series H round in March 2026 and the True Anomaly investment through a Series D in April.

Zipline offers transportation solutions for products, flying physical goods on autonomous aircraft. True Anomaly builds systems for tracking and defending satellites and other space assets in orbit.

AI switch years in the making

Paradigm co-founder Matt Huang, a former Sequoia Capital partner who started the VC firm in 2018 with Coinbase co-founder Fred Ehrsam, has spoken about AI publicly since at least 2023.

In a June 2023 post on X, Huang said the firm had “never been more dedicated to crypto” while calling advances in AI “too interesting to ignore.” He pushed back on the idea that the two fields were locked in “a zero-sum competition” and predicted “plenty of overlap” between them.

Paradigm has since put that thesis even in the crypto sector. It backed Nous Research, a decentralized AI infrastructure company, in a $50 million round, and in February 2026 the firm partnered with OpenAI to launch EVMbench, a benchmark that tests AI agents and their capacity to find and fix bugs in smart contracts.

Paradigm crypto investments continue

Regardless of the new interests in AI and funding towards this cause, Paradigm’s crypto investments are not stopping. The firm co-led a $175 million round in the decentralized lending protocol Morpho in June 2026.

Paradigm also led a seed round in July for M1X Global, a company building infrastructure for tokenized US Treasuries, and still holds stakes in prediction market operator Kalshi.

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