Venture capital firms are increasingly adopting a 'spray and pray' approach to AI investments, making it easier for new AI companies to enter the market. This strategy is contributing to a booming AI sector, with PitchBook data indicating that 87.5% of all U.S. venture dollars in the first half of 2026 went into AI megadeals. Non-AI companies saw median valuation step-ups of 1.6x, while AI companies experienced 2.2x, with Series D and later-stage AI companies seeing an astounding 6.6x increase. This has led to a significant jump in the median velocity of value creation at later stages, from $108.9 million in 2025 to over $1 billion in 2026 for AI firms, driven by companies like Anthropic, whose valuation grew 5.3x in just eight months.
Despite the significant investment, some experts caution about potential overvaluation. Jakub Nytra, founding partner at Purple Ventures, anticipates a 'shakeout' in the early-stage AI market within the next six to twelve months, as investors become more discerning about where AI truly creates value versus being a mere feature. David Ng, co-founder and CEO of Arki Finance, questions whether AI applications will generate sufficient productivity, revenues, and cash flow to justify current investment levels. Investors are now focusing on productivity growth, and companies solving expensive and complex problems using AI, such as TASS Vision, are expected to be the winners.
Globally, venture capitalists are pouring billions into AI. In Europe, over a third of the €66.2 billion in VC deals in 2025 were in AI-related companies. Notable European AI startups like Wayve, ElevenLabs, Lovable, and N8N have seen surging valuations. While a potential bubble raises concerns, Shane Chesson, founding partner at Openspace Capital, suggests that even if a bubble pops, the created infrastructure will still be transformative for many companies. The current market heavily favors new AI companies, with those that raised capital in 2021 or 2022 facing significant discounts in the secondaries market.
