AI startups now make up nearly half of US venture capital market: Report

Artificial intelligence startups dominate the US venture capital market, accounting for nearly half of the total $9.4 trillion valuation in the first quarter of 2026, according to PitchBook’s Q1 2026 report. Unicorn startups alone contribute over $5.8 trillion to this valuation, driven by record funding rounds in AI. OpenAI secured a reported $122 billion in funding at an $852 billion valuation, while Anthropic raised $30 billion at a $380 billion valuation in its Series G round. The valuation gap between AI and traditional software startups has widened significantly. AI startups now command median Series A pre-money valuations of $78 million, an 84% premium over non-AI peers, and Series D+ valuations of $4.7 billion, compared to $1.3 billion for non-AI companies. PitchBook attributes this surge to a few massive funding rounds, particularly in AI model and infrastructure firms. Investors are increasingly concentrating capital on top AI companies, creating a divide in the market. Competition for these deals leaves other startups struggling to secure funding, with expected returns falling below historical levels. The report notes that megafunds and corporates are driving this trend, directing enormous sums toward perceived winners. Despite the AI boom, the broader venture capital market remains under pressure. Only 15 VC-backed IPOs occurred in Q1 2026, far below the backlog of mature startups waiting to go public. Upcoming IPOs, including SpaceX’s planned $1.75 trillion valuation listing, OpenAI’s Q4 IPO, and Anthropic’s potential listing, could either reopen the market or absorb available capital, making it harder for smaller companies to access public markets. PitchBook also highlights that venture capital continues to experience negative cash flows, with more money going into investments than being returned through exits. However, the potential IPOs of SpaceX, Anthropic, and OpenAI could unlock roughly $3 trillion in exit value, offering a pathway to higher returns for investors. The AI-driven shift is reshaping venture capital dynamics, with investors prioritizing high-growth AI firms while traditional startups face tighter funding conditions.