The AI Advantage: A Venture Market Divided

The latest quarterly valuation report from PitchBook reveals a stark picture of the US venture capital market, where 87.5% of dollars invested this year have gone to a select few AI companies. This trend is not new, but its implications are far-reaching and demand closer examination.

Valuation multiples for non-AI companies compared to their AI counterparts paint a telling picture. Non-AI startups saw median valuation step-ups of 1.6x, while AI companies enjoyed significantly higher multiples of 2.2x. This disparity becomes even more pronounced when looking at Series D and later rounds, where AI companies are seeing valuations increase by an astonishing 6.6x.

The driving force behind this trend is clear: top-performing AI companies like Anthropic are pushing the boundaries of valuation and creating a new benchmark for venture returns. PitchBook’s senior research analyst Emily Zheng notes that median velocity of value creation at Series D and later rounds jumped from $108.9 million in 2025 to over $1 billion in 2026, nearly a 10x increase.

However, beneath this surface-level optimism lies a more complex reality. The market remains resistant to liquidity, and going public is hardly a viable option for most startups. While acquisitions have shown promise, with 2026 deal values reaching $375.4 billion, the results are far from uniform. ServiceNow’s Armis buyout and Capital One’s Brex deal demonstrate that even within this supposedly thriving market, valuations can be unpredictable.

The secondaries market offers a more nuanced perspective on this issue. Startups that have raised funds recently or in the past year are trading at median discounts of zero to 5%, while those from 2021 or earlier are seeing discounts of up to 59%. This dichotomy highlights the clear divide between AI and non-AI companies, with the former enjoying a privileged position in the venture market.

As Zheng notes, “Companies that cannot raise on strong terms right now generally are not raising at all.” This creates a self-reinforcing cycle where only those companies deemed worthy by investors have access to capital, further exacerbating the existing imbalance between winners and losers.

Some argue that this is simply a natural progression of the venture market, with AI companies being more attractive due to their growth potential. However, it’s essential to consider the broader implications. As Allie Garfinkle aptly puts it, “The world has indeed turned over,” but at what cost? As investors and founders become increasingly focused on AI, what does this mean for other sectors and startups that may not fit into this narrow definition of success?

Understanding the underlying dynamics driving this trend is key to answering these questions. Is it truly a matter of AI companies being more attractive, or are investors following a perceived leader? As we navigate this rapidly changing landscape, one thing is clear: the venture market has become increasingly polarized, with only a select few enjoying the benefits of the AI premium.

As investors and founders move forward into an uncertain future, they must confront these questions. Will this trend continue unabated, or will there be a correction in the market as investors begin to reassess their priorities? The AI advantage has created a new reality for venture capitalists and startups alike, but it remains to be seen whether this divide can be bridged or if it will become an even more insurmountable chasm.