Citigroup Ups Focus on Privately-Held AI Startups

Core Insights - Citigroup is enhancing its research focus on private companies, particularly in the artificial intelligence sector, to adapt to market changes [2][3][5] - The number of closely-held companies is increasing while public companies are declining, especially in AI and aerospace, leading to a more opaque financial landscape [3][4] - Nearly 1,500 startups globally are valued at $1 billion or more, indicating a significant shift in market dynamics [4] Investment Trends - The value of global M&A deals involving AI firms surged by 288% to $49.9 billion in 2024, with the number of deals increasing by 53% to 454 [6] - The number of M&A deals has risen by 130% since 2019, while deal value has skyrocketed by 730%, highlighting a robust trend in the AI sector [6] - During the first half of 2025, AI startups in the U.S. raised $104.3 billion, significantly outpacing VC-backed exits of $36 billion [7] Strategic Shifts - Citigroup aims to analyze how profit pools will be disrupted and identify potential winners and losers in both private and public sectors [5] - The trend of larger companies acquiring smaller firms for technology access is becoming more common, reflecting a natural progression in the industry [6]