Core Insights - The AI funding landscape has seen a dramatic increase, with global AI financing reaching $225.8 billion in 2025, a 97% year-over-year increase, despite a slight decrease in the number of deals [3][10] - The funding is increasingly concentrated, with 78% of the capital flowing to less than 5% of projects, indicating a shift towards larger investments in fewer, high-potential teams [3][4] - The valuation dynamics have shifted from "scale-driven" to "density-driven," where smaller, more efficient teams are achieving higher valuations per employee [5][75] Investment Trends - Global AI financing reached $225.8 billion in 2025, a 97% increase from the previous year, while the number of deals slightly decreased, indicating larger average deal sizes [10][26] - In Q4 2025, AI financing surged to $83.2 billion, doubling compared to the average of the first three quarters [13] - The median deal size in the AI sector rose to $4.1 million, with the U.S. leading at a median of $5 million per deal [28][26] Regional Insights - Over 85% of global AI funding in Q4 2025 was directed towards the U.S., with a significant valuation gap between U.S. and Asian projects [4][16] - The median deal size in the U.S. was $5 million, compared to $3 million in Asia, highlighting the regional valuation disparity [4][28] Valuation Dynamics - The capital's focus has shifted to "density-driven" valuations, where smaller teams are achieving higher valuations per employee, such as OpenEvidence with a valuation of $173.9 million per employee [5][75] - In 2025, 67% of M&A targets had fewer than 50 employees, indicating a trend towards smaller, more agile companies being favored in acquisitions [68][68] Exit Trends - In 2025, there were 830 global AI exit transactions, with 782 through M&A, marking a 61% increase year-over-year and the highest in five years [94][94] - The U.S. accounted for 47% of exit transactions, demonstrating its dominance in both investment and exit activities [98][98] Talent Trends - The fastest-growing segments in AI talent include AI agent browser infrastructure (87.2% growth), voice AI development platforms (54.1% growth), and multi-agent systems (49.8% growth) [66][66] - Talent is migrating from foundational model layers to application infrastructure, indicating a shift in focus within the AI industry [7][7] Unicorn Insights - In 2025, 75 new AI unicorns were created, with the U.S. dominating the landscape, holding 256 out of 360 total unicorns by year-end [80][81] - The top three newly minted unicorns in Q4 2025 were Mercor ($10 billion), Metropolis ($5 billion), and Unconventional AI ($4.5 billion) [90][90]