AI-Driven Venture Capital Returns: Thrive and Notable Funds Lead the Charge
Venture capital returns are being dramatically reshaped by investments in artificial intelligence, particularly large language models (LLMs). Recent data from the University of Texas/Texas A&M Investment Management Co. (UTIMCO) reveals exceptional performance from funds with early stakes in OpenAI and Anthropic, signaling a shift in the traditional “get rich slow” nature of VC investing.
Thrive Capital’s Explosive Growth
Thrive Capital’s Fund VIII, a 2022 vintage fund, has achieved an impressive Internal Rate of Return (IRR) of just over 126% as of November 30, 2025, according to UTIMCO disclosures. Newcomer reports this is the largest single-year IRR observed from a venture fund in recent coverage. This success is largely attributed to early investments in OpenAI, Cursor, and Base Power. Thrive’s 2022 growth fund as well holds investments in OpenAI and Ramp.
In December 2025, Thrive Capital invested roughly $1 billion in OpenAI at a $285 billion valuation, separate from OpenAI’s larger $100 billion funding round. CNBC reported this preferential deal underscores Thrive’s long-standing support for the AI startup.
Notable Capital’s Remarkable Turnaround
Notable Capital (formerly GGV Capital) has experienced a dramatic turnaround, with its core 2023 fund’s IRR soaring from -48% to 96% in just one year. UTIMCO data indicates this growth is primarily driven by stakes in Anthropic and Fal. However, Notable’s older funds from 2016 and 2018 have lagged behind other UTIMCO vintages.
Sequoia Capital and Emerging Trends
Sequoia Capital’s 2020 and 2021 funds have shown solid IRR growth, with its evergreen Sequoia Capital fund (launched in 2021) posting a positive IRR of 14.78%. The 2021 Seed fund saw its IRR rise from just over 6% to 11.3% year-over-year.
HongShan and Peak XV, which split from Sequoia, have faced challenges. HongShan’s 2020, 2021, and 2022 IRRs are negative or barely positive, reflecting difficulties in the Chinese startup sector. Peak XV’s 2020 funds are in positive territory, but subsequent vintages remain underwater.
The Power Law and LLM Concentration
Altimeter managing director Meghan Reynolds noted on X that gross profits from three LLM companies currently account for approximately 70% of all VC profits from the previous decade. Newcomer highlights this concentration of returns, with a small number of AI investments driving outsized gains for recent funds.
Rubén Domínguez Ibar of The VC Corner reported on LinkedIn that Thrive, Notable Capital, and Sequoia Capital are benefiting most from this trend.
Caveats and Future Outlook
It’s important to note that recent fund IRRs largely reflect valuation mark-ups on private companies, not realized gains. A broad market downturn could significantly impact these numbers. The data is current through November 30, 2025, and valuations may have shifted since then.
The rapid growth of AI startups is creating a new dynamic in venture capital, where early investments in a few key companies can generate substantial returns. This concentration of value underscores the importance of identifying and backing promising AI ventures.