Paradigm’s $1.2B AI Fund Targets Drone and Space Startups

Paradigm closed a $1.2 billion fund dedicated to artificial intelligence and robotics, the firm said. The fund has already deployed capital into two non-crypto companies: Zipline International, an autonomous drone-delivery service valued at $7.6 billion, and True Anomaly, a space-defense startup valued at $2.2 billion.

Managing partner Alana Palmedo said the expansion was a natural evolution, not a pivot. The firm sees autonomous agents and AI-powered payment systems as tightly connected to the crypto infrastructure it already funds.

Paradigm was co-founded in 2018 by Coinbase co-founder Fred Ehrsam and former Sequoia partner Matt Huang. It closed a record-breaking $2.5 billion crypto-focused fund in late 2021, followed by an $850 million early-stage crypto vehicle in 2024. By April 2025, the firm’s total assets under management sat at about $12.7 billion.

The firm rebranded in 2023, shifting its public identity from a "crypto-focused" investor to a "research-driven technology" firm. The move drew mixed reactions at the time, with some in the crypto community questioning whether Paradigm was pulling back from digital assets. Palmedo said the crypto commitment remains intact, with billions still allocated to blockchain ventures.

The move follows a broader pattern among crypto-native venture firms, which have been diversifying into AI over the past 18 months. The trend is part of a capital shift away from pure crypto investing, as AlphaScala has reported.

The firm’s assets under management stood at $12.7 billion as of April 2025, a figure that puts it among the largest crypto-native investors.