In the venture capital (VC) industry, a new breed of VC firms has emerged to embrace AI-empowered investment strategy instead of relying on human judgments. Although AI has already demonstrated advantages over humans in some domains, it is unclear whether AI can lead to superior performance in the venture capital industry. This research fills this gap by estimating the causal impact of a VC firm’s adoption of AI-empowered investment strategy on its success using matched portfolios of startups from AI-empowered and non-AI-empowered VC firms. We find that AI adoption tends to increase the success of a VC firm in terms of successful exits (e.g. IPO and acquisition) of startups it invests in. In addition, we also find that AI-empowered investment strategy can reduce racial bias but increase gender and local bias. The increase of gender bias is responsible for the superior performance of AI-empowered investment strategy while the reduction of racial bias and the increase of local bias is not.