Report: Paradigm Raises $1.2 Billion as AI Funding Outpaces Crypto Deals in 2026
Paradigm has closed a $1.2 billion fund built to chase artificial intelligence and robotics deals outside its crypto roots, as reported by Bloomberg’s Rebecca Torrence on July 8, 2026. The fund marks the venture firm’s third vehicle, following a $2.5 billion fund in 2021 and an $850 million fund in 2024. Paradigm manages approximately $12.7 billion across its funds.
The firm was founded in 2018 by Matt Huang, a former Sequoia Capital partner, and Fred Ehrsam, a co-founder of Coinbase. Together they built one of the more technically involved firms in crypto investing, often working directly with founders on protocol design alongside writing checks.
The new fund arrives as capital flows in two different directions: AI startups have pulled in the bulk of global venture dollars over the past year, while crypto deal counts have dropped sharply, with money concentrating in fewer, larger rounds.
Huang has publicly discussed AI since at least 2023, when Paradigm softened crypto-specific language on its website. He said the firm remained committed to crypto but found AI developments too interesting to ignore. Paradigm backed Nous Research, a decentralized AI infrastructure company, in a $50 million round in 2024 or 2025. In February 2026, the firm partnered with OpenAI to launch EVMbench, a benchmark testing AI agents on finding and patching smart contract vulnerabilities.
The $1.2 billion close lands close to an earlier Wall Street Journal report that Paradigm was seeking up to $1.5 billion for a frontier technology fund. The firm has already deployed capital from the new vehicle into Zipline, a drone delivery company, through a Series H round in March 2026, and into True Anomaly, a space defense startup, in a Series D round in April 2026. Both investments sit entirely outside crypto.
Paradigm has not stepped away from crypto. The firm co-led a $175 million round in Morpho, a decentralized lending protocol, in June 2026, and led a seed round for M1X Global, a company building infrastructure for tokenized US Treasuries, in July 2026. The firm also holds positions in Kalshi and other prediction market and payments companies.
By using its existing technical team to evaluate AI and robotics deals rather than building a separate group, Paradigm keeps its crypto expertise in the room for adjacent bets, including AI-driven security tools and autonomous payment systems. The move signals that even well-capitalized, crypto-native firms see limited room to deploy larger funds inside crypto alone at this time. Paradigm has not issued a detailed public statement with limited partner names or deployment targets.