Global Startup Ecosystem Value Declines Amid AI-Native Growth, US China Lead Funding

The Global Startup Ecosystem Report 2025 highlights a significant downturn in global startup activity since the pandemic, with early-stage funding deals and ecosystem valuations dropping sharply, except in a few cities like Beijing, Los Angeles, and Tokyo. Silicon Valley remains the leading hub for AI-native startups, hosting 22% of such companies worldwide, while New York City and London vie for second place. The report stresses the need for diversifying AI startup development beyond the US and China, which currently dominate AI budgets focused mainly on infrastructure and research rather than local entrepreneurial growth. Across the Asia-Pacific region, AI adoption in B2B sectors is accelerating, but a critical workforce skills gap poses challenges, prompting companies to prioritize rapid upskilling to keep pace with evolving roles and technologies. Small and medium businesses are leveraging AI more nimbly than large enterprises by adopting modern AI tools without legacy system constraints, resulting in notable revenue growth and operational efficiencies. Together, these trends underscore the transformative impact of AI on global economies and the urgent need for supportive policies and workforce development to harness its full potential.