US venture capital investment remained resilient in Q4’25 despite significant headwinds, including an extended government shutdown and a sharp decline in quarterly deal volume. On a full-year basis, total US VC investment reached a four-year high of $339.4 billion, falling just short of the record set in 2021.
AI continued to dominate VC investment trends in the US during Q4’25, with the top eight deals together accounting for over $32 billion in investment. Anthropic raised the largest funding round of the quarter ($15 billion), followed by a $6.2 billion raise by Project Prometheus, a $2.3 billion raise by Anysphere, and a $2 billion raise by Reflection AI.
The breadth of value propositions by the AI companies that attracted $1 billion+ funding rounds in Q4’25 is notable-ranging from LLM-focused firms and traditional and renewable energy-backed AI infrastructure companies to startups focused on AI-enabled coding solutions, agentic AI platforms, and the development of industry solutions. This diversity highlights how rapidly the AI space is evolving and how investors are pouring their attention — and investment — into companies with transformative AI solutions or entrepreneurs they believe will be able to create them. At the same time, companies with AI wrappings have predominantly seen investment wane as VC investors have become more intentional with their AI investments.
Despite disruption from the US federal government shutdown in Q4’25, investor sentiment continues to suggest that the IPO window remains open for high-quality companies with durable business models and clear paths to profitability. During Q2’25 and Q3’25, several US IPOs delivered strong debuts, with robust first-day trading performance. However, post-IPO performance for many of these companies has since moderated, indicating that pent-up demand contributed to a degree of frothiness, with early trading pops not fully reflective of underlying company fundamentals.
Even so, the US IPO environment remains on an upward trajectory, with increased activity expected in the first half of 2026 as a growing cohort of IPO-ready companies move towards exit.
One key uncertainty in the IPO market is the timing and sequencing of exits by large, AI-centric companies. While the prospect of blockbuster AI IPOs is compelling, such offerings could absorb a disproportionate share of investor attention and capital, potentially crowding out demand for non-AI issuers. How and when these AI-driven exits materialize and their impact on broader IPO activity will be an important dynamic to watch over the coming year.
M&A activity in the US was notably robust in 2025, particularly in contrast to the subdued environment of 2024. A significant share of this activity was driven by large corporates increasingly favoring “buy over build” strategies, as the pace of innovation has outstripped their ability to develop solutions internally at the speed the market now demands. For many corporates, the pressure to innovate is already elevated and expected to intensify further, pointing to continued strength in M&A activity heading into 2026.
At the same time, becoming — and remaining — a public company has grown more complex, costly and uncertain, especially for businesses without proven, profitable operating models. As a result, an increasing number of startups are prioritizing high-quality M&A exits with well-capitalized acquirers over the uncertainty and execution risk associated with pursuing an IPO.
Heading into 2026, US venture capital investment is expected to remain strong, with AI-focused companies continuing to attract outsized funding rounds. Activity across other segments of the private capital markets is also expected to increase, as more companies favor the flexibility of remaining private over pursuing a public listing.
M&A deal value is anticipated to rise as companies across industries increasingly turn to acquisitions to accelerate innovation and mitigate the risk of falling behind. Traditional corporate venture capital investment is likewise expected to remain elevated over the coming year. IPO activity in the US is also likely to continue its recovery, supported by a sizable backlog of IPO-ready companies. In parallel, a growing number of startups are investing in IPO readiness initiatives — such as strengthening financial reporting capabilities and upskilling finance teams — in anticipation of potential public offerings in 2026 and 2027.
Looking ahead, secondary transactions are also expected to gain momentum in 2026, alongside continued use of special purpose vehicles as alternative liquidity pathways.
Explore the latest deals and venture capital trends through the fourth quarter of 2025
