Just because VCs are flooding AI favorites with cash doesn’t mean the industry has made a comeback.
That’s what PitchBook and the National Venture Capital Association’s newly-released 2025 data on venture capital shows—an uneven market that’s consolidated around a few perceived winners in the most-talked-about sector, AI.
2025 U.S. VC deal value soared to $339.4 billion, not far from 2021 highs of $358.2 billion. And yet: 50% of that 2025 deal value was invested in just 0.05% of the completed deals. And those deals are, of course, the ones you’d expect, from OpenAI’s $40 billion funding round to Databricks’s $4 billion Series L round that valued the company at $134 billion. (Miniscule compared to OpenAI on paper, last valued at $500 billion and reportedly in conversations at valuations as high as $830 billion.)
“If you look beyond AI, dealmaking isn’t hitting new highs,” said Kyle Stanford, PitchBook director of U.S. venture research, via email. “A majority of first-time financings are AI companies too. So venture has made a wholesale change in what is being funded.
Despite deal value nearing the stratospheric heights of 2021, Stanford points out that exit value is just 34% of the 2021 peak.
“And fundraising is falling because of it,” Stanford added. “When you see fundraising reach only $66.1 billion of new commitments, it starts to hit home just how much LPs are hurting from the lack of exits.”
In short, something’s gotta give.
It’s important to right-size this—not all of the private markets are quite so lopsided. Consider PitchBook’s 2025 private equity breakdown: Though PE firms are also struggling with fundraising, 2025 ultimately saw private equity’s deal value surpass $1 trillion for the second time in its history ($1.2 trillion for 2025, slightly under the 2021 high of $1.3 trillion). That $1.2 trillion was decisively spread across more than 9,000 deals.
What is the natural evolution for a market where an overwhelming amount of capital is consolidating around a few companies and a few firms? Andreessen Horowitz just raised $15 billion. PitchBook’s Stanford and I have spoken a lot over the last two years about the challenges new VCs face in raising money, and a16z’s fundraise alone is a decisive signal.
“LPs are focusing on established firms,” said Stanford via email. “Seeing a firm like a16z, no matter how name-brand it has become, raise $15 billion in a down market is astonishing and shows where priorities lie.”
Good Day… As you sail into your long weekend, here’s a fun $7 million seed funding round scoop on Good Day, cofounded by Kyle Hency, who started irreverent shorts brand Chubbies with college friends. He sold that company in 2021, and now he’s back. Read more here.
We’re off for MLK, as I hope you are. See you Tuesday,
Allie Garfinkle X: @agarfinks Email: [email protected] Submit a deal for the Term Sheet newsletter here.
Joey Abrams curated the deals section of today’s newsletter. Subscribe here.
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