Good day. The artificial intelligence boom in venture funding seems to be taking a breather.

The data firm Crunchbase says U.S. startup funding has slowed dramatically in March, with about $13 billion in seed- through later- and growth-stage funding so far. March isn’t over, but Crunchbase says it is on track to deliver a fraction of investment tallies from either of the prior two months.

The culprit? Fewer giant AI megarounds closing this month, Crunchbase says. The Iran war probably hasn’t helped dealmaking, either.

The month-over-month plunge is particularly stark since February included OpenAI securing a whopping $110 billion in new funding. But the influence of AI megarounds is a recurring feature in today’s venture capital market.

The most recent PitchBook-NVCA Venture Monitor said 50% of the 2025 U.S. deal value was invested in just 0.05% of the completed deals. At the same time, there were 44% fewer megadeals last year than in 2021, the report said.

Venture capital is top-heavy these days. A PitchBook analyst note last week pointed out that should SpaceX, OpenAI, and Anthropic go public this year, they would likely be the three largest VC-backed IPOs ever. What’s more, the note said, they could conceivably create more value than all VC-backed IPOs since 2000 have collectively.

And now on to the news...

OpenAI scraps Sora video platform. OpenAI is planning to pull the plug on its Sora video platform, a product it released to great fanfare last year that has since fallen from public view. The move is one of a number of steps OpenAI is taking to refocus on business and coding functions ahead of a potential initial public offering as soon as the fourth quarter of this year. CEO Sam Altman announced the changes to staff on Tuesday, writing that the company would wind down products that use its video models.

A federal judge on Tuesday said the U.S. government appeared to be punishing Anthropic by banning the artificial-intelligence company—in retribution for bringing into the public view its contracting dispute with the Pentagon.

• “It looks like an attempt to cripple Anthropic,” U.S. District Judge Rita F. Lin of the Northern District of California said during a court hearing. Such actions “of course would be a violation of the First Amendment.”

Victory Capital withdrew its bid to acquire Janus Henderson, clearing the way for Trian Fund Management and General Catalyst to buy the asset-management firm.

• Victory dropped out of the bidding war on Tuesday after Trian Fund Management and General Catalyst increased the value of their agreement to buy Janus by $3, to $52 a share in cash.

Funds

Chicago-based early-stage investor Motivate Ventures launched a new fund with a target of $100 million to back fintech startups.

People

Direct-to-consumer bridal brand Birdy Grey appointed Anthony Potgieter as chief growth officer. He was previously senior director of e-commerce at Stanley 1913.

GTMfund named Jason Demant as the firm’s newest partner.

Flare Capital Partners appointed Graham Gardner and Rochelle Walensky as executive partners.

Norwest promoted Gal Amran to vice president on the venture team.

Cloaked, a New York-based privacy and security startup focused on helping individuals take control of their personal data, scored $375 million in new funding. The investment consists of a Series B round led by General Catalyst and Liberty City Ventures, and growth financing from General Catalyst's Customer Value Fund.

Halter, a New Zealand-headquartered provider of virtual fencing technology for ranchers and farmers, collected $220 million in Series E funding at a $2 billion valuation. Founders Fund led the investment, which included contributions from DCVC, Bessemer Venture Partners and others.

Mirage, a New York-based AI video startup formerly known as Captions, secured $75 million in growth financing from General Catalyst’s Customer Value Fund.

Rocketlane, a San Francisco-based professional services automation platform, raised $60 million in Series C funding led by Insight Partners.

Doss, a San Francisco-headquartered startup building operations software for inventory-based businesses, snagged a $55 million Series B round. Madrona and Premji Invest co-led the funding, which saw participation from Intuit Ventures, Greyhound Capital, Commerce Ventures and General Catalyst. Karan Mehandru, managing director at Madrona, will join the company’s board.

Above Security, an agentic managed insider threat platform, emerged from stealth with $50 million in funding from investors including Ballistic Ventures and Norwest. The company is based in New York and Israel.

Shepherd, a San Francisco-headquartered commercial insurance platform, landed $42 million in Series B funding. Intact Private Capital led the round, which included participation from Spark Capital and Costanoa Ventures.

Highlight AI, a San Francisco-based intelligent operating system for teams and AI agents, grabbed $40 million in Series A funding. Khosla Ventures led the round, which included additional support from 359 Capital, General Catalyst, Common Metal and others.

Spade, a New York-based startup turning transaction data into actionable insights for financial institutions, nabbed $40 million in Series B financing. Oak HC/FT led the round, which included participation from Andreessen Horowitz, NAventures and Y Combinator.

EPIC Microsystems, a semiconductor startup developing power delivery solutions for AI infrastructure, obtained $21 million in Series A funding. Led by Seligman Ventures, the round included participation from Intel Capital and others.

Lucid Bots, a Charlotte, N.C.-based autonomous exterior cleaning startup, fetched $20 million in Series B funding co-led by Cubit Capital and Idea Fund Partners.

Littlefish, a South Africa-based merchant operating system for African banks, closed a $9.5 million Series A round led by Partech.

Zalos, a San Francisco-based provider of computer agents for finance operations, was seeded with a $3.6 million investment led by 14Peaks Capital.

• Landmark Verdict Says Meta Harmed Children, Allowing Adults to Prey on Them

• Meta Names New Leader of Push to Adopt AI Throughout Its Workforce

• ChatGPT, Claude and Gemini Entered the WSJ Bracket Pool. One Might Actually Win.

• Martin Sorrell Says S4 Capital’s Future Depends on AI Adoption at Scale

• Anduril, Palantir Are Developing Golden Dome Missile Shield’s Software

• Epic Games Cuts About 1,000 Jobs Across Company Amid ‘Fortnite’ Slump (Bloomberg)
   
• Confronting the CEO of the AI company that impersonated me (The Verge)

This newsletter was compiled by Yuliya Chernova, Matthew Strozier and Zachary Cole.

Share your tips, comments and questions: vcnews@wsj.com

The team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

Join us on LinkedIn.