The year 2025 stood out as a remarkably successful period for venture capital, fueled by a surge in AI-related investments. Based on initial statistics from Crunchbase , the worldwide venture capital investment level in 2025 nearly matched its third-highest figure recorded , surpassed solely by the banner years of 2021 and 2022.
During the initial six months of 2025, burgeoning companies secured $205 billion , reflecting a 32% increase compared to the same period in 2024, thus representing the most prosperous half-year for venture capitalists since early 2022. Global funding experienced another 38% expansion on an annual basis in the third quarter, demonstrating growth across various development phases, even though funding is becoming more centered around the preeminent AI entities.
Notably, 2025 marked the occurrence of the two most substantial venture capital funding events ever , both within the AI sector:
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Scale AI — $14.3 billion (Q2 2025);
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OpenAI — $40 billion (Q1 2025).
In light of these developments, Crunchbase News consulted with leading figures in venture capital to ascertain: will 2026 perpetuate the AI boom, or will the market witness a slowdown?
Greater Financial Resources in Venture Capital — Yet Not Universally Distributed
The surveyed investors are nearly in total agreement: the overall capital deployed in venture activities will rise in 2026 .
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George Mathew ( Insight Partners ) anticipates a surge in venture capital investment volumes by roughly +10% .
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Tim Tully and Matt Murphy ( Menlo Ventures ) foresee even more robust expansion — as much as +25% , pointing to increased fund sizes and larger average investments at every stage.
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Anders Ranum ( Sapphire Ventures ) also projects +10–15% growth, though emphasizing that it will prominently focus on significant investments from well-capitalized funds.
The fundamental takeaway: while there will be an influx of venture capital, it will be directed towards a smaller subset of businesses.
Forecasts: A Dichotomous Market Landscape
According to investors, the year 2026 will likely showcase a divided or bipolar venture market :
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AI-centric companies will persist in attracting funds at escalating valuations, notably at the growth and later phases.
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Concurrently, “second-tier” organizations (ranked 3rd through 8th in their respective domains) will encounter financing obstacles and will increasingly pursue M&A activities or private equity options as routes to generating liquidity.
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Traditional SaaS enterprises emerging from the zero-interest rate policy (ZIRP) era will either undergo flat funding rounds or aim to secure an exit via acquisition.
Ranum emphasizes that the “ new normal ” for 2026 entails premium valuations for leading AI ventures and demanding conditions for the typical market participant .
What Avenues Will Receive the New Capital?
Notwithstanding the considerable volume of seed and Series A transactions, the majority of new funding will yet again be channeled into growth-oriented rounds .
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Mathew: large funding rounds in AI infrastructure and foundational models.
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Murphy: pioneering AI entities will set themselves apart from competitors, drawing in considerable private growth capital.
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Ranum: Series A viewed as a “critical validation juncture”, but highlighting a barbell-like effect — significant investments in expansion stages alongside an oversupply at the seed stage.
Sector-Specific Upswings and Declines Expected in 2026
Who Is Poised to Thrive?
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AI infrastructure serves as the “tools and resources” for the AI revolution.
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Defense tech — influenced by the current geopolitical climate and burgeoning defense budgets.
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Healthcare AI — prompted by pressures on healthcare providers' profitability.
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Robotics — owing to decreasing hardware costs and advancements in physical AI systems.
Who Will Experience a Diminution in Share?
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Climate tech — characterized by long developmental timelines and dependence on patient capital investments.
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Crypto — subsequent to the price corrections seen in the latter half of 2025.
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Vertical SaaS solutions lacking AI integration represent a less appealing investment proposition in the evolving landscape.
Transitioning from Basic AI “Overlays” to In-Depth Integration
Investors generally concur: the period of superficial, AI-based interfaces is drawing to a close .
In 2026, success will hinge on:
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comprehensive embedding into operational workflows ,
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access to proprietary datasets ,
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or possession of specialized domain knowledge .
Nonetheless, the application tier is not vanishing; rather, a 50/50 balance between the application level and infrastructure layer is materializing, accompanied by distinct advancements in ERP, ITSM, and financial accounting technologies.
Liquidity: A Rise in Mergers & Acquisitions, Marginal Improvement in IPOs
While a surge in IPO activity is not anticipated in 2026, the return of liquidity is becoming more apparent :
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IPOs are reserved solely for scalable firms generating over $500 million in income and exhibiting high expansion rates.
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M&A activities will intensify, particularly as large organizations procure AI-related assets.
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Secondary offerings are emerging as an increasingly vital resource for investment funds and company founders.
Venture Capital: Size is Advantageous
The increase in AI-focused funding rounds is reinforcing the strengths of diverse investment funds . Smaller players are being compelled to either exit at earlier phases or accept smaller investment shares.
Due to the investor community’s (LP) interest in AI, fundraising efforts in 2026 are expected to be at least as robust as in 2025 , and potentially even more so.
Concise Venture Capital Market Predictions for 2026
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Insight Partners: Automation and machine learning are already capable of performing full-time tasks, with reduced human intervention.
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Menlo Ventures: AI is increasingly adopted across enterprises, entering a substantial phase of expansion.
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Sapphire Ventures: The dominant theme of 2026 will be “fundamentals first,” wherein investment prioritizes tangible AI outcomes and penalizes superficial implementations.
The year 2026 signals more capital availability in the VC sphere, coupled with diminished chances for average performers. AI is definitively shaping the market: successful ventures draw in substantial funding rounds, while others consider mergers, acquisitions, or exiting the market. For investors, it’s a year for attentiveness; for startups, it marks a moment of reckoning.