US AI megadeals drive global VC to USD $331 billion

Global venture capital investment rose to USD $330.9 billion in the first quarter of 2026, driven by a cluster of very large AI-related funding rounds, according to KPMG.

The quarterly total more than doubled from USD $128.6 billion in the previous quarter, even as the number of deals fell from 10,097 to 8,464. Ten rounds of more than USD $2 billion accounted for over USD $206 billion of global investment, underscoring how heavily the market relied on a small number of transactions.

Most of the largest deals were in the United States and centred on artificial intelligence. They included OpenAI at USD $122 billion, Anthropic at USD $30.6 billion, xAI at USD $20 billion, Waymo at USD $16 billion and Databricks at USD $7 billion, as well as Polymarket at USD $2.6 billion and Shield AI at USD $2.3 billion.

Regional split

The Americas attracted USD $270.1 billion in venture capital during the quarter, more than 80 per cent of the global total. The US alone accounted for USD $267.2 billion, more than double its previous high and sharply up from USD $72.6 billion in the final quarter of 2025.

Europe recorded USD $25.7 billion, a 14-quarter high, while Asia reached USD $31.8 billion, a 12-quarter high. Both regions posted gains, but on a far smaller scale than the surge in the US market.

"Q1'26 marked a very strong start to the year for VC investment across all regions of the world, with megadeals occurring on a scale far beyond anything we've seen before. While the Americas - entirely due to the US - reached an extraordinary record high, both Europe and Asia also saw very healthy investment. AI remained the dominant investment theme, with interest pouring not only into large language model focused companies, but increasingly into startups focused on the application of AI across industries and verticals," said Conor Moore, Global Head of KPMG Private Enterprise, KPMG International.

AI focus

Software was the largest sector for venture capital investment worldwide, drawing a quarterly record of USD $225.2 billion. That was close to the sector's total for the whole of 2025 and approached the annual record of USD $241.5 billion set in 2021.

The concentration of funding around AI extended beyond large language model developers. Investors also backed companies working on semiconductors, datacentres, AI platforms, agentic AI, physical AI and software designed for specific industries.

In the Americas, the quarter also produced 66 new unicorns, up from 44 in the previous quarter. Many were AI businesses, reflecting investor demand for the sector and the higher valuations attached to it.

Europe and Asia

Europe's market remained firm, helped by a record number of large rounds. Six companies in the region raised USD $1 billion or more, the highest number on record. Investors showed interest in AI-related businesses spanning infrastructure, autonomous driving, energy management, enterprise software, cleantech and legaltech.

Defence technology also gained ground in Europe as investors continued to look at dual-use technologies. Momentum weakened in the final month of the quarter, however, as geopolitical uncertainty weighed on activity.

Several large deals across different markets and sectors supported Asia's recovery. Among the biggest were a USD $2 billion round for China-based Rokid and a USD $2 billion round for Singapore-based DayOne.

China recorded a particularly strong quarter, supported by renewed interest in AI, deep tech, biotech, semiconductors, and space-related businesses. Major Chinese AI rounds included funding for Rokid, Earendil Labs, Moonshot AI and Stepfun.

Exits and funds

Global exit value rose from USD $184.3 billion in the fourth quarter of 2025 to USD $413.5 billion in the first quarter of 2026, the highest level since the final quarter of 2021. The increase was driven mainly by mergers and acquisitions, while IPO activity remained relatively subdued.

IPO transactions accounted for USD $65.2 billion in value during the quarter, but there were only 83 new listings. Public markets in the Americas began the period on a firmer footing before losing momentum as geopolitical uncertainty affected sentiment, while Asia maintained the stronger path established in 2025.

Fundraising conditions also varied by region. Europe and Asia remained slow, but the US showed some improvement, with USD $47.8 billion raised during the quarter compared with USD $66.7 billion during all of 2025. The rebound was led in particular by funds exceeding USD 500 million.

"As we head into Q2'26, geopolitical tensions are casting a big shadow over the VC investment market globally, particularly in the Americas and Europe. VC investors are becoming increasingly concerned about rising oil prices and the possibility of renewed inflation and rate increases should tensions continue. While this could keep IPO activity subdued in the near term, AI is expected to remain a clear standout for investors globally, alongside defense tech, spacetech, and cybersecurity," Carolina de Oliveira, Global Lead of Emerging Giants, KPMG International, said.