AI start-ups amass record $150bn funding cushion as bubble fears mount

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Silicon Valley’s hottest start-ups have raised $150bn in funding this year as their financial backers advise them to build “fortress balance sheets” to protect them in case the artificial intelligence investment boom turns to bust in 2026.

PitchBook data showed that the biggest US private companies raised a record haul in 2025, smashing the previous high of $92bn raised in 2021, with investors rushing to back top AI groups such as OpenAI and Anthropic.

Venture capitalists and industry experts said the money would help insulate founders against an investment downturn as public markets begin to fret over heavy spending on AI infrastructure — as well as fuelling growth.

“You should make hay while the sun is shining,” said Lucas Swisher, a partner at Coatue who has backed OpenAI, Databricks and SpaceX. “2026 might bring something unexpected . . . when the market is providing the option, build a fortress balance sheet.”

This year’s fundraising figures have been boosted by a handful of unprecedentedly large deals. These include OpenAI raising a $41bn round led by Japan’s SoftBank, Anthropic’s $13bn raise in September and Meta’s investment of more than $14bn into data-labelling start-up Scale AI.

Other fast-growing AI companies, including coding agent group Anysphere, search company Perplexity and AI research start-up Thinking Machines Lab, have also tapped VCs multiple times this year.

A number of investors said they had advised start-ups to build reserves while enthusiasm remained high about AI’s potential to transform the economy.

“The biggest risk [for start-up founders] is you don’t raise enough money, the funding environment dries up, and your business could go to zero,” said Ryan Biggs, co-head of venture investment at Franklin Templeton. “Or you can take a little dilution, and if the business works, it truly doesn’t matter: you’re still extraordinarily wealthy either way.”

On average, start-ups raise new funding every two to three years, according to Carta, a software group that tracks private markets. But recently, the best performing AI start-ups have been returning to investors within months — even as funding dries up for many smaller start-ups.

“Investors are gravitating to those late-stage deals where there is more certainty of who the winner is,” said Biggs. “There are a dozen companies you want to be in. Beyond those, it’s a challenging landscape.”

A further driver of 2025’s fundraising boom is that leading AI groups are growing at a far faster rate than past tech start-ups.

The valuation of Anysphere, maker of the Cursor coding tool, has gone from $2.6bn at the start of the year to $27bn in November. Over the same period, its annual recurring revenue — a metric favoured by fast-growing start-ups — increased roughly 20 times to $1bn.

Perplexity, the AI search engine seeking to challenge Google, has raised money four times in the past year, despite its executives saying they do not require more cash.

Cost pressures have led to more frequent fundraisings, especially at groups building “frontier” AI models that require vast amounts of computing power and expensive chips.

OpenAI’s revenues for 2025 are about $13bn, according to people close to the company, but the group is losing billions of dollars each year as it spends to develop its models, products and infrastructure.

High-profile funding rounds are also opportunities for start-ups to market themselves to prospective customers and employees amid a fiercely competitive market for AI engineers.

“If I’m a start-up I have to show my equity is worth more than a pay cheque,” said Swisher, citing financial technology group Ramp as one example of a start-up that has used its soaring valuation as a talent acquisition tool.

Ramp’s valuation has spiralled through four share sales this year, from $13bn to $32bn, with the company raising $1bn in the process.

The frenzy of deals means many VC firms have burned through cash faster than anticipated. A number of the largest firms have kicked off the process of raising new funds. Those include Thrive Capital, Andreessen Horowitz and Tiger Global, according to public filings and people familiar with the matter.

Groups including Lightspeed Venture Partners and Dragoneer raised new multibillion-dollar funds in December, in a sign that the hottest start-ups will still be able to access more venture capital cash in 2026.

Investors also said founders of the biggest start-ups are bulking up their balance sheets to take advantage of acquisition opportunities, particularly if investor sentiment turns next year and smaller rivals struggle to raise new funds.

“Put on your seatbelt,” said Jeremy Kranz, founder of VC firm Sentinel Global and formerly head of technology investment at Singaporean sovereign wealth fund GIC.

“It’ll be like an acquisition a week the minute there’s a spook in the public markets. These guys will take their $500bn market cap as a private company and start buying all over the place.”