US Venture Capital Turns Cool on Open-Weight AI Startups as Closed Models Absorb Two-Thirds of Funding

Major tier-one venture firms are declining pitches from American open-weight AI companies, with at least one startup reporting that practically every top VC passed. Closed-model developers took roughly two-thirds of AI venture capital in the first half of 2026, leaving firms building freely downloadable alternatives to Chinese models struggling for institutional backing.