AI powers $3.96B venture boom in U.S. construction tech
Venture activity in the built environment saw significant year-over-year increases during this year’s second quarter, largely driven by sustained popularity in artificial intelligence-powered technologies in the sector. Of the 159 AEC industry venture deals recorded in Q2, 110 (or nearly 70%) involved startups identified as AI/ML-driven, according to BuiltWorlds’ latest quarterly venture report.
Overall, venture inflows and deal volume in the built environment were up in Q2 from the same time last year. Inflows saw a $1.7 billion, or 75.2%, increase from Q2 2024 to $3.96 billion, while deal volume experienced a 41% increase over the same period, from 113 to 159 deals.
“Both (deal) count and capital inflows are on pace to outperform 2024 levels in 2025,” the report reads, clarifying that the growth is taking place “despite economic headwinds from high interest rates and tighter liquidity.”
This pace is especially impressive considering that 2024 was a record-setting year, both in regards to deal count as well as inflows. The driving factor? Artificial intelligence.
AI Attracts Significant Investor Attention
AI is currently attracting the lion’s share of built environment venture investment.
Of the $3.96 billion invested in built environment technology startups in Q2 2025, $2.71 billion, roughly 68%, flowed into companies that are integrating AI/ML into their products or operations. And while these technologies can be seen popping up throughout the primary built environment technology sectors BuiltWorlds tracks (ie, building tech, construction tech, and infrastructure tech) one seems to be a better fit for AI (at least at the moment) than the others.
“AI seems to have found solid footing in the built environment and particularly in the construction tech sector, where a majority of AI-related VC funding has ended up,” writes Max Quertermus, Venture & Investment Senior Analyst for BuiltWorlds and the report’s author. “With a wide range of applications across project management, workforce management, accounting and payments, and advanced equipment and robotics, the sector is ripe with opportunity for AI startups.”
The construction tech sector saw more than double the inflows going to building tech and passed the infrastructure tech sector by more than $100 million. Still, all three sectors are seeing growth in AI technologies.
“The building tech sector saw relatively lower capital inflows to AI/ML startups than construction and infrastructure tech,” the report reads, “but the deals that it did see accounted for nearly 44% of all deals tracked in the sector.”
In infrastructure tech, while AI is not yet as prominent as it is in construction tech, the appetite for the technology is clearly there.
“In the energy and utilities sector, AI/ML enhances operations through smart grids, predictive maintenance, and the seamless integration of renewable energy,” Quertermus writes, adding that there are also considerable applications for AI in asset health management across the infrastructure industry. “AI/ML enables data-driven diagnostics and supports predictive and prescriptive analytics, allowing organizations to anticipate issues and optimize performance.”
The report gives the example of geospatial information systems and mapping as a ripe opportunity for AI/ML integration, referring specially to technologies that process and interpret data.
“These technologies make it possible to model and visualize infrastructure assets and risks in real time.”
Whether this influx of interest in AI/ML technologies in the built environment is a result of the spiking excitement over its potential or sustainable interest remains in question. But as the data shows, deal sizes over the last four years appear to be normalizing, which could be a sign of what to expect in the future.
For those interested in learning more about venture activity in the built environment, including meeting and mingling with some of the top investors and leading startups in the space, considering attending BuiltWorlds’ upcoming 2025 Venture East Conference.
About BuiltWorlds
BuiltWorlds is a leading research platform, providing insights, advisory services, networking, and conferences that focus on guiding business and technology leaders in the buildings and infrastructure sectors. BuiltWorlds has a network of more than 250 companies from over 25 countries, and its services are rooted in the belief that connection, innovation and informed decision-making leads to better business outcomes. Through focused research and accompanying analysis, a robust digital platform, and a growing schedule of educational programming, BuiltWorlds equips and enables its network of clients to navigate a dynamic and evolving industry landscape.