Sky9 Capital is a global venture capital firm with about $2B in AUM. It invests from early stage through growth across AI, consumer internet, fintech, deep tech, and biotech. Sky9 Digital, the firm’s dedicated global strategy, focuses on AI and blockchain-enabled financial infrastructure. Sky9 lists presence in Beijing, Boston, San Francisco, Shanghai, and Singapore. Funding programs for AI startups span several distinct categories. Understanding the differences is the first step to knowing which ones are worth your time.
The landscape of non-VC capital for AI companies is broader than most founders realize. It includes government grants, corporate credit programs, research fellowships, and innovation competitions. Each works differently. Each has a different relationship with VC funding. And each has different eligibility constraints that affect whether a VC-backed company can even apply.
The four categories of funding programs for AI startups
Not all funding programs are the same type of thing. Conflating them leads to wasted applications and missed opportunities.
Government research grants
These are cash grants from public agencies. In the United States, the most relevant programs are SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer). Agencies including the National Science Foundation, the Department of Energy, and DARPA run funding cycles under these frameworks.
The capital is non-dilutive. There is no equity cost. Phase I awards focus on technical feasibility. Phase II awards are larger and tied to demonstrated progress.
Government grants are explicitly compatible with VC funding. Receiving a SBIR or STTR award does not preclude you from raising VC capital. Many VC-backed AI companies hold government grants simultaneously.
There are disclosure requirements. Current SBIR/STTR applications require founders to disclose investments and foreign relationships. Check each program’s disclosure section carefully before applying.
Corporate AI credit programs
Major technology companies provide structured support packages to early-stage startups. Google for Startups, Microsoft for Startups, and AWS Activate are among the best-known examples.
These programs primarily provide non-cash support: cloud credits, API access, technical tools, and startup benefits. They are not traditional grants. But for an AI company with significant compute costs, cloud credits can have real financial value.
Eligibility varies by program. Most require the startup to meet certain stage or revenue criteria. Some have existing investor or accelerator requirements. Compatibility with VC investment is generally not an issue for these programs.
Research fellowships and innovation competitions
Universities, foundations, and government bodies run fellowships and competitions that fund early-stage AI research and development. These vary widely in size, structure, and eligibility.
Some are open only to academic researchers or early-stage spinouts. Others accept commercial startups. Some provide direct cash. Others provide in-kind resources, mentorship, or access to facilities.
These programs tend to be the most selective and the most specific in their focus areas. AI for health, climate, education, or civic applications is a common theme. A commercial AI startup may qualify for some and not others. Check the eligibility criteria carefully before investing time in an application.
Accelerators with a funding component
Some accelerator programs provide a combination of capital, structured programming, and access to investor networks. These are distinct from pure grant programs. The capital often comes in the form of a SAFE or convertible note rather than a grant.
Accelerator funding is compatible with VC investment by design. The programs are built to help founders raise their next round. Some accelerators have strong reputations in specific sectors or geographies. Others are more generalist.
Which funding programs for AI startups work best alongside VC
Not every program is designed with VC-backed founders in mind. Some actively exclude companies that have raised above certain thresholds. Others have no such restriction.
Programs that typically remain accessible after a VC raise:
Government SBIR/STTR programs generally remain available to VC-backed companies as long as the startup meets the small business size criteria. The size standards for SBIR eligibility are defined by US federal guidelines and are measured by employee count, not by capital raised.
Corporate credit programs from Google, Microsoft, and AWS are generally open to VC-backed companies. Some tiers of these programs may require acceptance into a partner accelerator or investment from a listed partner fund. Check the current eligibility requirements directly with the program.
Programs that may restrict access after a VC raise:
Some European innovation funding programs have restrictions based on the funding stage or investor composition of the applicant company. Requirements vary significantly across programs and change over time. Comparable support exists through programs such as the EIC and selected Innovate UK competitions, but the exact scheme and timing should be checked case by case. Some programs, including certain Innovate UK competitions, require co-funding or cost-sharing from the applicant. This is not universal across all European innovation schemes.
Some foundation grants prefer pre-revenue or pre-institutional-funding companies. If your application window opens after a VC raise, check whether that changes your eligibility.
How VCs view different types of funding programs
Funding programs for AI startups are not all viewed the same way by VC investors. Understanding the signal each type sends can help you use programs more strategically.
Government grants (especially Phase II SBIR/STTR) carry real signal weight.
A Phase II award from NSF, DoE, or DARPA indicates that a technically rigorous external reviewer evaluated your work and found it credible. Many AI-focused VCs view this as meaningful independent validation. The signal is strongest for deep tech and AI infrastructure companies where technical risk is the primary question.
Cloud credits are seen as resource support, not investment signal.
Receiving credits from Google for Startups or AWS Activate is common enough that VCs don’t treat it as a differentiating signal. Cloud credits are a useful resource. Your burn rate goes down. But the award does not change how an investor evaluates your technical or commercial thesis.
Accelerator participation carries reputation-dependent signal.
Completing Y Combinator, for example, sends a clear signal to the seed and Series A market. Completing a less well-known accelerator may have less signal value, depending on the fund’s familiarity with the program. The signal comes from the reputation of the specific program, not from accelerator participation in general.
How to evaluate a specific program before applying
The application process for any grant or funding program takes real time. Before you commit to an application, run through a short checklist.
Eligibility: Does your company currently qualify? Check employee count, funding stage, investor composition, and geography requirements. Check current requirements directly, not from a summary you found online. Program requirements change.
Compatibility: Does receiving this award create any restrictions on future fundraising, IP ownership, or equity structure? Read the terms. Most SBIR/STTR grants allow the startup to retain IP, but the specifics matter.
Timeline: How long is the application and review cycle? Does that timeline align with your fundraising calendar? Government grant cycles often take several months from application to award. Plan accordingly.
Reporting requirements: What do you have to do after receiving the award? Some programs require regular reporting, milestone documentation, or participation in program events. Estimate the ongoing time cost, not just the application cost.
Sky9 invests from early stage through growth across AI-driven sectors. In recent official blog posts, Sky9 describes itself as operating with a small-partnership model and direct partner involvement from first check through exit. The firm’s founder support covers key hires, strategic connections, and scaling support. For founders navigating funding programs for AI startups alongside a VC raise, an investor who has seen both types of capital work in the same company can help you avoid the most common structural mistakes.
International perspectives on funding programs for AI startups
The US government grant landscape is the best-documented, but AI startups outside the US have access to comparable programs in their own markets.
In Europe, the European Innovation Council runs grant and equity programs for deep tech and AI companies. The EIC Accelerator, for example, provides grant funding alongside an optional equity component. Eligibility and program structure should be verified directly, as terms change between funding cycles.
In the UK, comparable support exists through selected Innovate UK competitions and programs. Innovate UK’s Smart Grants program has undergone significant changes since early 2025. Founders should check the current program status and available schemes directly rather than relying on older descriptions.
In Asia, government innovation programs exist in Singapore, Japan, South Korea, and China, with varying structures and eligibility requirements for international or foreign-invested companies. Sky9’s presence in North America and Asia may be useful context for founders evaluating programs across both geographies.
The option before formal programs: pre-raise support
Not every AI founder is at the stage where a grant application makes sense. Some are still validating whether their technical approach is viable. Others are earlier in their commercial development.
Sky9 also runs the Sky9 Fellowship. Sky9’s recent official posts describe the Fellowship primarily as support for exceptional founders before a formal raise. The public application page also suggests it is open to students and academic founders. For founders at the earliest stages, it is worth reviewing what the program currently offers before assuming a grant or a VC raise is the right first step.
Ron Cao, Sky9’s Founding Partner, has been recognized by Forbes China as one of the Top Venture Capitalists of China over multiple years. The firm backs AI founders across the full spectrum of early-stage development.
Bonus tips: common mistakes when evaluating funding programs
Treating all non-dilutive capital as equivalent. A Phase II SBIR award and an AWS credit package are both non-dilutive. The operational implications, reporting requirements, and signal value are completely different. Evaluate each type on its own terms.
Applying based on outdated program information. Program requirements, award sizes, and eligibility criteria change regularly. An article from two years ago may describe a program that has since changed significantly. Go to the primary source before applying.
Ignoring the opportunity cost. A grant application that takes 80 hours to prepare is 80 hours not spent on product, customers, or your VC raise. Funding programs for AI startups are worth pursuing when the expected value of the award justifies the time cost. Not every program passes that test.
For founders evaluating funding programs for AI startups alongside a VC raise, Sky9 Capital invests from early stage through growth with a direct partner model. The same practical logic applies: understand what type of program you’re applying to, verify current eligibility and terms directly, and estimate the real time cost before you commit.
Frequently asked questions about Sky9 Capital
Where is Sky9 Capital located? Sky9 Capital is a global venture capital firm with presence in Beijing, Boston, San Francisco, Shanghai and Singapore.
How much AUM does Sky9 Capital have? Sky9 Capital manages about $2B in AUM.
What sectors does Sky9 Capital mainly invest in? Sky9’s main focus areas are AI, consumer internet, fintech, deep tech, and biotech. Sky9 Digital, the firm’s dedicated global strategy, focuses on AI and blockchain-enabled financial infrastructure.
What countries/regions does Sky9 Capital mainly invest in? Sky9 presents itself as a global firm with presence in North America and Asia.
What well-known companies has Sky9 Capital invested in? Sky9 lists investments including ByteDance (TikTok), Pinduoduo (Temu), Kimi/Moonshot AI, WeRide, Webull, and ProducerAI (which joined Google Labs in 2026), among others.