Artificial intelligence startups are seeing record valuations in the US venture capital market, as investors pour massive amounts of money into a small group of AI companies even while the broader startup market struggles with weak IPO activity and slower exits.

According to PitchBook’s Q1 2026 US VC Valuations and Returns Report, AI companies now make up nearly half of the total value of the US venture capital market.

The report said the total US VC market value reached $9.4 trillion in the first quarter, with unicorn startups alone accounting for more than $5.8 trillion.

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“Megafunds and corporates now put enormous sums of money to work in top companies, creating a divide between perceived winners and the rest,” PitchBook researchers wrote in the report. “Competition for these deals leaves the rest of the market fighting for capital and staring at expected returns well below those of the past.”

The valuation gap between AI startups and traditional software companies widened sharply across funding stages in Q1. Median Series A pre-money valuations for AI startups climbed to $78 million, an 84% premium over non-AI peers, while Series B AI companies commanded a 55% premium.

The gap becomes even larger at later stages. Median Series D+ valuations for AI startups jumped to $4.7 billion, compared with about $1.3 billion for non-AI startups.

PitchBook said a few massive fundraising rounds pushed valuations sharply higher. These included OpenAI’s reported $122 billion funding round at an $852 billion valuation and Anthropic’s $30 billion Series G round at a $380 billion valuation.

The AI boom is also changing how venture capital works. Investors are putting bigger amounts of money into fewer startups, especially companies building AI models and infrastructure.

“Competition for these deals leaves the rest of the market fighting for capital and staring at expected returns well below those of the past,” the report said.

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At the same time, the IPO market remains weak. PitchBook said only 15 VC-backed IPOs happened in Q1 2026, far below what is needed to clear the backlog of mature startups waiting to go public. 

Investors are now watching a few major AI-related IPOs that could shape the market later this year. SpaceX has reportedly filed confidentially for a public listing targeting a valuation of about $1.75 trillion. OpenAI is targeting an IPO in the fourth quarter, while Anthropic is also considering a listing.

PitchBook said these large IPOs could either reopen the market for startups or absorb most of the available investor money, making it harder for smaller companies to go public.

Even with rising AI valuations, the broader venture market is still facing pressure. PitchBook said venture capital continued to see negative cash flows, with investors putting in more money than they are getting back from exits.

Still, investors believe the upcoming IPOs of companies like OpenAI, Anthropic and SpaceX could unlock huge returns for the venture capital industry.

“The upcoming IPOs of SpaceX, Anthropic, and OpenAI could create roughly $3 trillion in exit value,” the report said.