The global venture capital landscape showed resilience in the third quarter of 2025, buoyed primarily by investments in artificial intelligence (AI). However, the recovery remains limited, focusing primarily on substantial funding rounds and successful exits, according to the latest PitchBook-NVCA Venture Monitor report released this week.
In a notable shift, 64% of venture capital deal value in the third quarter was directed towards AI companies, marking an unprecedented high. Sectors such as software-as-a-service and big data, which are intricately linked to AI, were the only ones to surpass $25 billion in investments this year. The report indicates that U.S. deal volume is projected to rise by around 8% compared to 2024, potentially making this year one of the most active in the last decade.
While exit activity, particularly involving initial public offerings (IPOs), saw a decline in value compared to the second quarter, it still stands as the second-highest quarterly value since 2021. Notably, public offerings—including reverse mergers—outperformed mergers and acquisitions in value through the third quarter, despite the latter having already surpassed 2024 totals.
AI significantly impacted exit metrics as well, accounting for 40% of total exit value this year. Major exits included CoreWeave Inc., which went public earlier in March. With 317 exits by AI startups thus far, enthusiasm from investors in this sector remains strong.
Year-to-date commitments by venture capital firms reached $47.8 billion, though only 378 new funds were closed. The stagnation in U.S. fundraising reflects liquidity challenges and uncertainties in deal-making.
Looking ahead, PitchBook anticipates that ongoing capital calls related to AI investments may exert pressure on funds, potentially leading to reduced dry powder. As exit markets gradually open, this added liquidity is expected to enhance capital recycling into venture capital, albeit selectively.
In Europe, AI’s influence on deal value is evident, though the absence of large funding rounds means that exits are primarily driven by mergers and acquisitions. The region’s fundraising activity has hit its lowest point in a decade, with experts advocating for the reopening of IPO markets and larger cross-border listings to inject vital growth capital back into scaling companies.
In Asia and Latin America, venture activity varied significantly. While sectors related to supply chain and manufacturing experienced growth, challenges such as tariff uncertainties and diminished liquidity continue to affect many markets, with a few notable deals skewing regional totals.
Key insights from the report emphasize that while capital is available, it is increasingly selective. Founders creating truly unique AI solutions or critical platforms are likely to attract investment and favorable exit opportunities, whereas others may encounter stricter terms and prolonged fundraising timelines.
