Paradigm Expands Beyond Crypto With a New $1.5B AI Fund
- Paradigm plans a $1.5B fund to widen its reach into AI and robotics markets now.
- The firm will keep backing crypto while it pursues broader frontier-tech deals ahead.
- AI now draws most venture capital, and Paradigm is adjusting to that shift quickly.
Paradigm plans to expand beyond crypto into artificial intelligence and robotics as it seeks to raise up to $1.5 billion for a new fund, according to people familiar with the situation. The venture firm, founded by Matt Huang and Fred Ehrsam, wants broader flexibility as capital shifts toward AI. It intends to continue backing crypto companies while pursuing frontier technology deals.
A Broader Mandate Beyond Crypto
Paradigm ranks among the largest venture investors focused on crypto. Matt Huang, a former Sequoia Capital partner, and Fred Ehrsam, co-founder of Coinbase, launched the firm in 2018. They attracted major institutional limited partners, including university endowments.
As of the end of 2024, Paradigm managed more than $12.6 billion in assets, according to a regulatory filing. The firm oversees an open-ended fund investing in public and private crypto companies. It also manages two venture funds, including an $850 million vehicle raised in 2024 and a $2.5 billion fund from 2021.
The new vehicle would mark Paradigm’s third venture fund. People familiar with the matter said managers no longer wanted limits that might force them to skip strong opportunities outside digital assets. They also pointed to growing links between crypto markets and AI, particularly in agentic payments executed autonomously by AI systems.
Shift From Web3 Roots
In 2023, Paradigm removed crypto-specific language from its website. The change fueled speculation about a strategic pivot. At the time, Matt Huang denied abandoning crypto but acknowledged that the team had explored developments in artificial intelligence.
This new fundraising effort formalizes that exploration into capital deployment. Paradigm now seeks flexibility to evaluate frontier technology deals alongside traditional crypto investments. Sources familiar with the strategy said the firm will rely on its existing technical investment team to assess both sectors.
The move also reflects a wider market transition. In 2025, AI captured more than half of all venture capital funding. Billions flowed into startups focused on machine learning, generative AI, and autonomous systems. As venture dollars concentrate in AI, firms like Paradigm have adjusted their scope.
Overlap Between Crypto and AI
People familiar with the firm said the overlap between crypto and AI continues to grow. Agentic payments, where AI tools execute transactions autonomously, represent one area of convergence. As digital assets interact with automated systems, investment themes increasingly cross sector boundaries.
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Industry observers view Paradigm’s expansion within this broader narrative of capital migration. The venture capital funding patterns demonstrate that artificial intelligence has become the primary sector that investors choose to fund with their growth capital. Paradigm plans to expand its activities in both robotics and emerging technologies while still maintaining its cryptocurrency holdings.
In practice, Paradigm has already moved toward cross-domain initiatives. The firm recently collaborated with OpenAI to create EVMbench, a cybersecurity benchmarking tool. The tool evaluates how effectively AI models detect and repair vulnerabilities in smart contracts. This collaboration signals operational engagement between decentralized systems and advanced machine learning.
Paradigm expects to continue backing crypto companies at every stage of development. At the same time, the firm seeks latitude to pursue robotics and AI ventures without artificial sector constraints. As it prepares to raise up to $1.5 billion, one question shapes its strategy: can a crypto-native investor capture growth across two of technology’s fastest-moving frontiers?
