For venture capital, 2025 was all about artificial intelligence—a trend that’s all but certain to carry into 2026.
More than half of all VC dollars—and 36% of total deals—now flow to AI companies, according to a recent Silicon Valley Bank report. Crunchbase recently reported that 14% of all global venture investment in 2025 went to AI giants OpenAI and Anthropic. The year also saw huge deals like a $2 billion seed round raise by Thinking Machines Lab, the AI startup founded by former OpenAI CTO Mira Murati.
AI deals are also often closing quickly, with investment rounds that once would have taken weeks to close being handled in a manner of days, says Tim Tully, a partner at Menlo Ventures. “You’re seeing people raise these large rounds with no decks, which is kind of shocking, or not even absolute clarity around precisely what the company is going to do,” he says. “You’re seeing funding of teams over what the team is doing.”
But even amid speculation that the industry could be in a bubble—and some signs of public fatigue with the technology that’s snuck into everything from therapy sessions to children’s toys—investors and industry observers say the AI push will continue in 2026.
TAM explosion
In some ways, AI mimics the investment wave around other recent transformative technologies, like the rise of the PC, internet, and mobile phones. “New technologies come, and they’re transformative, and that drives a lot of investment,” says Steven Neil Kaplan, a professor at the University of Chicago who studies venture capital. “Some of them work out, some of them don’t, and hopefully the world becomes more productive.”
But Michael Carmen, co-head of private investments at Wellington Management and the coauthor of a venture capital outlook report the firm released in December, says AI companies have recently been growing revenue at a historically fast rate—quicker than previous generations of software-as-a-service (SaaS) companies. Widespread internet use has given new AI products essentially instant access to a huge potential market, Carmen adds, noting, “When you think about the (total addressable market) of AI over the longer term, it could be the largest TAM of anything that we’ve ever seen in technology.”
AI is increasingly competing with traditional SaaS businesses for both customers and investors, says Saagar Bhavsar, partner at Begin Capital. For one thing, artificial intelligence has businesses wondering if it’s more viable to build software tools in-house with the aid of new coding assistants and other AI agents.
