Despite ongoing debates about its long-term sustainability, the artificial intelligence industry remains a magnet for substantial investment. While some critics warn of an impending AI bubble reminiscent of past market crashes, I have argued the sector's trajectory diverges sharply from the Dot-Com boom of the late 20th century. Yet, regardless of perspective, capital continues to flow, fueling both industry giants and innovative startups across diverse sectors, from legal to health, and design to LLMs .
Quilter Secures $25 Million for AI-Driven Electronics Design
The electronic design automation (EDA) software market is experiencing rapid growth, doubling from $11.10 billion in 2022 to an estimated $22.21 billion by 2030, growing at a CAGR of 9.1%. A major catalyst? The integration of AI and machine learning, which is revolutionizing how complex design challenges are tackled while driving down costs. Meanwhile, traditional EDA solutions, largely stagnant for decades, are being left behind by this wave of innovation.
Source: Grand View Research
Existing automation tools don’t understand physics, producing designs requiring extensive manual cleanup, thereby negating any promised time savings. But experts, including Sergiy Nesterenko, CEO and founder of Los Angeles-based Quilter, believe in five years, designing a PCB manually will feel like compiling code by hand. His company, the first and only to publicly demonstrate fully autonomous printed circuit board (PCB) layout through physics-driven AI, is aiming to prove that. The company raised $25 million in Series B funding led by Index Ventures.
Healthcare Sees AI Investment: Foundation Health Earns $20 Million
From San Francisco, Foundation Health closed a $20 million Series A to push forward AI’s critical role in health and medical care. Backed by Define Ventures, Vanderbilt University, and others, the round focuses on leveraging AI to enhance healthcare outcomes and operational efficiency. The company developed an in-house AI pharmacist assistant, called PAIGE AI, that automates patient communication and prior authorization workflows across medical and pharmacy benefits.
Legal Tech Gets an AI Boost: Vulcan Technologies Raises $10.9 Million
Historically, the legal industry has been relatively slow to adopt transformative technologies, but is quickly changing. The legal AI software market is slated to more than triple, from $3.11 billion in 2025 to $10.82 billion by the year 2030 at a CAGR of 28.3% over the forecast period. We've seen evidence of this in recently reported AI news:
- Latest AI Funding And Acquisition Deals Spotlight Innovation, Growth, And Faster Time-To-Market
- Over $120 Million Pours Into AI Startups Across New Frontiers
Austin-based Vulcan Technologies is a participant in this surge. The company secured $10.9 million in seed funding led by 468 Capital and Transpose Platform, along with five other investors. Vulcan's platform offers three specialized AI systems designed to transform how legal professionals, researchers, and regulators interact with American law. Vulcan ingests all state and federal statutes, regulations, executive orders, and case law into a unified, AI agent-navigable database.
Source: AI-Generated by Andre Bourque
Y Combinator Funds Dozens of AI Startups in Fall 2025 Batch
The seed stage provides a fascinating peek into the cutting edge of AI development. Y Combinator, the renowned startup accelerator attributes approximately 30% of their portfolio companies as AI startups, up from less than 10% five years ago. The organization continues to bet on investments in dozens of AI startups as part of its Fall 2025 batch.
A sampling of startups receiving $500,000 in seed funding, includes:
Hillclimb
Focusing on LLMs, San Francisco-based Hillclimb is entering a fiercely competitive yet incredibly active space. The continued investment in LLM development, even at the seed stage, reflects the belief that there’s still ample room for innovation in how these powerful models are built, fine-tuned, and applied across various sectors.
AutoAce
AutoAce, based in Cambridge, Massachusetts, provides an AI voice assistant that answers calls, books appointments, and integrates with dealership management systems. The platform supports over 20 languages and offers features like real-time scheduling and automated customer interactions. It aims to enhance service revenue for car dealerships through intelligent call handling.
Rivet (tryrivet.design)
San Francisco-based Rivet’s funding highlights the growing demand for intelligent tools that can assist designers, automate repetitive tasks, and even generate novel design concepts.
Bravi
Another San Francisco startup, Bravi, provides AI voice and chat assistants that handle customer interactions, qualify leads, and book appointments. The platform integrates with existing CRM systems to enhance customer communication.
Bolna
India-based Bolna provides a platform for AI voice agents that facilitate inbound and outbound calling in multiple vernacular Indian languages. The platform supports various applications including customer support, sales, and recruitment.
Unsiloed AI
San Francisco-based Unsiloed AI specializes in transforming unstructured data through intelligent automation. Their unique approach leverages advanced AI agents to streamline document processing and enhance data usability. This enables organizations to efficiently manage and extract insights from their documents, driving productivity and informed decision-making.
Explore all Y Combinator F25 batch companies here.
Investor Insight
Source: AI-Generated by Andre Bourque
Looking ahead, the AI funding trajectory in late 2025 and beyond will likely be shaped by three key factors:
Global Investments
The U.S. leads in all AI investments and megadeals, but Europe and Asia remain competitive in AI infrastructure. Expect to see more AI investment activity out of India and Latin America as AI technology begins to slowly trickle into mainstream activities.
Applied AI Over Hype
Investors are shifting from broad AI platforms to vertical-specific solutions, particularly in healthcare, legal tech, and industrial automation.
Accelerator-Driven Innovation
Programs like Y Combinator are becoming critical launchpads for AI startups, providing not just capital but also mentorship, network access, and go-to-market strategies.
For investors and entrepreneurs, the message is clear: AI startups that address tangible pain points, whether in electronics design, healthcare inefficiencies, or legal workflows, are more likely to secure funding than those chasing generic AI trends. For investors, the opportunity lies in identifying under-the-radar AI applications before they scale, particularly in sectors where AI adoption is still in its early stages. As 2025 progresses, the intersection of AI with defense, space, quantum computing, and climate tech will further expand the funding horizon, making it an exciting yet competitive landscape for innovation.
Disclosure: The author, Andre Bourque, has no financial or professional ties to any of the companies mentioned in this article and has received no compensation for its publication.
Source Image: AI-Generated by Andre Bourque
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
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