Venture investments saw “unprecedented spending” on AI compute and frontier labs, as investors poured $300 billion into 6,000 startups during the first quarter of this year.
Notably, funding for startups in the first quarter of 2026 alone accounted for nearly 70% of the total venture capital invested throughout all of 2025, a report by Crunchbase noted. This quarterly figure also exceeded the annual investment totals seen in any year prior to 2018.
Much of the capital in Q1 was concentrated in artificial intelligence startups, with a significant share directed toward a small group of U.S.-based companies through record-breaking deals.
Four of the five largest venture funding rounds ever documented occurred during this period. Leading the group were frontier AI firms OpenAI ($122 billion), Anthropic ($30 billion), xAI ($20 billion), along with autonomous driving company Waymo ($16 billion).
Together, these four companies secured $188 billion, representing about 65% of total global venture investment for the quarter.
Artificial intelligence dominated last quarter’s funding landscape, reaching unprecedented levels. Companies in the sector attracted $242 billion—about 80% of all global venture capital in Q1. This far surpasses the prior high set in the first quarter of 2025, when AI made up 55%.
The IPO market was “somewhat lackluster” in Q1, with few companies going public, however, start-up M&A was strong. Exits were valued at $56.6 billion, the third-highest startup M&A quarter since 2022, Crunchbase reported.
Some of the largest M&A deals in Q1 included Savvy Games Group’s acquisition of mobile game developer Moonton from ByteDance for approximately $6 billion, as well as Capital One’s planned acquisition of fintech startup Brex for $5.15 billion.
Q1 2026 was dominated by massive funding rounds from leading labs, but the broader data reveals that growth occurred across every stage of startup funding, with average deal sizes increasing overall.
Unlike the cloud and mobile boom, this wave of innovation extends beyond software into the physical world, attracting significant investment in areas like infrastructure, autonomous vehicles, robotics, and manufacturing, Crunchbase noted.
As startup valuations climb and many companies sit on record levels of private funding, expectations are rising for the IPO market to reopen in 2026.
Photo: Photon Photo/Shutterstock
