US startup funding slowed sharply in March after a record-breaking February, with American companies raising ~$13 billion this month compared to over $100 billion in prior months. The decline stems largely from fewer AI megadeals, including the absence of rounds like OpenAI's $110B fundraise and Anthropic's $30B financing that dominated February. While early- and seed-stage deals remain stable, late-stage funding dropped significantly, reflecting investor caution amid geopolitical tensions and stock market volatility.

The Iran War, which erupted on Feb. 28, coincided with the funding slowdown, exacerbating broader economic uncertainty. US stock indexes fell in March, though a partial rebound occurred Monday. Notably, the downturn is US-specific; European funding hit annual highs, driven by AI infrastructure unicorn Nscale and Advanced Machine Intelligence securing major rounds. This divergence highlights regional differences in risk appetite and market conditions.

February may remain unmatched for years, as OpenAI's $110B deal set a historical precedent unlikely to be surpassed soon. Analysts note that late-stage funding for typical tech companies—not just AI giants—shows less severe declines, suggesting the broader ecosystem remains resilient. Investors are advised to monitor these trends rather than overreact to short-term fluctuations.

Key takeaway: The March funding slump underscores volatility in high-stakes AI investments, but early-stage stability and European growth offer counterbalance. Long-term implications depend on resolving geopolitical risks and restoring market confidence.