In a significant move that underscores the continuing growth of the artificial intelligence (AI) landscape, private equity firm Blackstone recently invested $300 million in Chatsworth-based DataDirect Networks (DDN), a company specializing in data storage and management.
With over two decades of experience, DDN is positioned at the forefront of enabling businesses to handle the enormous data requirements essential for AI systems, including chatbots and autonomous vehicles.
Notable clients of DDN include industry giants such as Nvidia, Elon Musk’s newly formed AI startup xAI, Google Cloud, and major automaker Ford, highlighting the company’s critical role in the AI ecosystem.
With a workforce of around 1,000 employees, DDN’s chief marketing officer, Jyothi Swaroop, expressed optimism about the investment’s potential impact on the company’s outreach and capabilities.
“They have a trillion dollars of assets under management, and it’s a company that we thought would really move the needle for us in terms of extending our reach,” Swaroop noted.
This substantial investment in DDN exemplifies the trend of increased funding within the Greater Los Angeles region, known for its burgeoning tech scene, which has drawn considerable venture capital interest.
According to research firm CB Insights, venture capital and private equity firms poured a remarkable $3.1 billion into 144 deals in the L.A. area in the first quarter of this year, reflecting a 15% increase over the same period last year.
The Greater L.A. area, which includes Los Angeles, Ventura, Orange, Riverside, and San Bernardino counties, has notably seen a resurgence in investment levels following a brief downturn in 2023 that coincided with the collapse of the cryptocurrency exchange FTX.
Investments are diversifying, with funding not only flowing into AI but also targeting healthcare, e-commerce, and defense technology, signaling a new era of ambitious projects beyond traditional ad tech and video applications.
Mark Suster, a general partner at Upfront Ventures based in Santa Monica, highlighted, “Today it’s going into much more ambitious projects. It’s going into satellites, alternate energy, national defense, drones, shipbuilding, and pharmaceutical drug discovery. So it’s a lot more exciting than it ever has been.”
Among the standout funding recipients in the first quarter were Torrance-based defense firm Epirus, which garnered $250 million, and Thousand Oaks’ Latigo Biotherapeutics, which attracted $150 million.
Latigo is focused on developing non-opioid pain treatments, while Epirus produces technology designed to counteract drone swarm attacks.
Interestingly, Econic Partners, an economic consulting firm, reportedly raised the highest amount at $438 million, although the firm contested this figure, stating it raised nine figures but declined to disclose the exact total.
Masha Bucher, founder and general partner at Day One Ventures, emphasized El Segundo’s potential as a hub for deep tech startups.
These companies are tackling complex challenges, including issues such as water scarcity, benefiting from L.A.’s skilled workforce sourced from aerospace and defense sectors.
Silicon Beach, a burgeoning tech hub, also offers entrepreneurial accessibility to major city infrastructure, particularly Los Angeles International Airport, which facilitates travel for funding pursuits.
Bucher remarked, “There is a power of community, and it’s definitely like a power spot on the map.”
Her firm continues to invest in various AI startups and even a unique eye-scanning crypto initiative backed by OpenAI’s Sam Altman aimed at ensuring user verification.
While AI is a focal point, investor interest is not limited to this sector. For example, Whatnot, a live shopping app based in Culver City, secured $265 million, marking it as one of the largest deals in the L.A. area this year.
This platform allows users to buy and sell items like clothing and collectibles in real time, with the functionality to engage directly with sellers by asking questions during live videos.
Whatnot reported crossing $3 billion in sales in 2024 and projects that figure will double in the upcoming year.
Despite not yet being profitable, the startup has demonstrated rapid growth that has attracted investor confidence.
“Live and social shopping has the potential to be an absolutely monstrous market,” asserted Whatnot’s Chief Executive, Grant LaFontaine.
With around 750 employees across the U.S. and Europe, LaFontaine indicated that the recent funding would be crucial for marketing strategies aimed at attracting more users and enhancing the shopping experience.
He noted, “Like other businesses, Whatnot uses AI for customer service and to moderate content on the platform.”
LaFontaine, however, claimed a pragmatic perspective on AI. “I tend to be sort of a purist, which is that consumers don’t care about AI. They care about problems being solved.”
Historically, businesses employed AI long before the rise of generative AI and associated technologies that have gained popularity through platforms like ChatGPT.
The current enthusiasm surrounding generative AI has initiated a wider contemplation across various industries on how this technology could redefine operational landscapes.
Investors’ eagerness towards AI has significantly influenced nationwide venture capital behavior, with prominent firms attracting notable funding rounds.
OpenAI, based in San Francisco, raised an astounding $40 billion, resulting in a valuation of $300 billion, marking it as one of the most substantial rounds recorded.
Jason Saltzman, head of insights for CB Insights, remarked, “There’s a ton of opportunity to rewrite the playing field on which people do business in everything from across verticals, across industries.”
He observed a heightened recognition of potential in AI, stressing that stakeholders are keen to seize opportunities in this rapidly evolving field.
Globally, the first quarter saw a staggering $121 billion in venture capital raised, with AI firms accounting for 20% of the deals — the highest figure ever noted by CB Insights.
On a national scale, $90.5 billion of venture capital was secured in the last quarter, with Silicon Valley leading the charge, attracting $58.9 billion.
This surge in interest has prompted many AI startups to either expand or establish new offices in San Francisco due to the city’s wealth of talent and proximity to prestigious universities.
OpenAI’s vice president of global affairs, Chris Lehane, commented on the transformative nature of the technology, stating, “People understand that this is a transformative technology. It’s going to permeate virtually every aspect of life.”
Although Silicon Valley remains dominant in AI venture capital, other cities, including New York, are also emerging as competitive destinations for funding.
The global landscape is further complicated by competition from countries like China, as legislative discussions around AI regulation heat up, raising concerns among technology lobbying groups about the potential impact on innovation in California.
However, Suster expressed confidence in the California tech ecosystem’s resilience, asserting, “The opportunity set is so great here. Do we occasionally get backwards-looking bills that try to overregulate how the industry works in California? Of course we do. We find ways to work around them.”
image source from：https://www.latimes.com/business/story/2025-06-06/venture-capital-funding-pours-into-ai-startups
