Venture Capital Intelligence Report
February 02, 2026 • Synthesizing insights from top-tier VCs
VCs are bullish on AI fundamentals but increasingly selective on valuations. Post-ZIRP environment has created a two-tiered market with clear winners in infrastructure and enterprise applications.
Series A+ rounds remain competitive for quality companies, but seed stage has normalized from 2021-2022 froth. AI companies command premium valuations despite broader market correction.
Public market multiples compressing (NASDAQ down 0.94% this week) driving more disciplined private valuations. AI infrastructure still commands 15-25x revenue multiples.
Massive compute demand for training and inference driving infrastructure innovation. Custom silicon and distributed compute are key battlegrounds.
AI agents are finally ready for enterprise deployment with improved reliability and ROI measurement. Vertical-specific solutions showing strong traction.
IRA funding catalyzing domestic manufacturing. Battery tech and carbon capture scaling beyond pilot phase.
New wave of fintech focused on embedded finance and real-time payments infrastructure. AI-powered underwriting creating new opportunities.
GitHub Copilot proved market demand. Opportunity for specialized tools across development lifecycle and domain-specific coding.
Most AI investment has been in infrastructure; the real value creation is in application layer agents that can complete full workflows
IRA funding has de-risked climate tech investments; focus shifting from R&D to scaling production
Compute infrastructure will commoditize faster than expected; vertical AI applications have stronger moats
FDA guidance on AI medical devices creating predictable approval pathway; payer willingness increasing
Companies built on AI foundations will have fundamentally better unit economics than those retrofitting AI
AI agents controlling real-world systems - robotics, manufacturing, logistics
Vision models finally reliable enough for physical world tasks; compute costs declining rapidly
$2T+ addressable market across manufacturing and logistics
Early signals from: Kleiner, Benchmark, Index
Companies to watch: Physical Intelligence, 1X Technologies, Agility Robotics
Peer-to-peer networks for AI training and inference to break hyperscaler monopolies
GPU shortages driving demand for alternative compute; crypto infrastructure maturing
$500B+ compute market that could be partially decentralized
Early signals from: a16z, Lightspeed, Accel
Companies to watch: Render Network, Akash Network, Gensyn
Engineering biology for manufacturing chemicals, materials, and pharmaceuticals
AI accelerating protein design; manufacturing costs reaching parity with traditional methods
$1T+ addressable across chemicals, materials, pharma
Early signals from: General Catalyst, Bessemer, Sequoia
Companies to watch: Ginkgo Bioworks, Zymergen, Modern Meadow
Industry-specific software built from ground up with AI, not retrofitted
Industry-specific models becoming viable; enterprises ready to adopt AI-first tools
Every vertical SaaS category could be rebuilt - $300B+ market
Early signals from: Greylock, Index, General Catalyst
Companies to watch: Harvey (legal), Glean (enterprise search), Jasper (marketing)
Previous: Red hot in 2020-2022 → Now: Significantly cooled
User acquisition costs skyrocketed, iOS privacy changes hurt targeting, TikTok dominance makes competition difficult
What Changed: Platform risk became apparent with Twitter/X chaos, regulatory scrutiny increased
VCs Cautious: Benchmark, Accel, General Catalyst
Previous: Peak hype in 2021-2022 → Now: Selective interest only
Regulatory uncertainty, multiple protocol failures, institutional adoption slower than expected
What Changed: Focus shifted from speculation to real utility; infrastructure plays preferred over DeFi protocols
VCs Cautious: Sequoia, Kleiner, Greylock
Previous: Hot through 2021 → Now: Mostly avoided
iOS changes destroyed unit economics, supply chain costs increased, market saturation
What Changed: Customer acquisition costs made most DTC models unsustainable without significant differentiation
VCs Cautious: Lightspeed, Bessemer, Accel
Focus on workflow replacement, not just task automation - users want end-to-end solutions
💡 Map the entire user workflow and build AI that can handle 80%+ of the process autonomously
— Greylock Partners
ROI measurement is critical for enterprise AI adoption - build measurement into the product
💡 Include built-in analytics that quantify time saved, costs reduced, or revenue generated
— Sequoia Capital
Don't get caught in the model wars - focus on fine-tuning and data moats instead
💡 Build proprietary datasets and fine-tuning pipelines rather than betting on specific foundation models
— Benchmark
Leverage government incentives in initial customer conversations - it's not just about the tech anymore
💡 Build expertise in IRA tax credits and other incentives into your sales process and customer success
— Kleiner Perkins
Bottom-up adoption is still king, but procurement processes are getting more complex
💡 Plan for both viral developer adoption AND enterprise procurement from day one
— a16z
Deal volume down 25% YoY but average deal size up 40%. Flight to quality accelerating with VCs focusing on fewer, higher-conviction bets. AI companies raising at 15-25x revenue multiples while other categories compress to 5-8x.
Series C • Lead: Google • Others: Spark Capital, Salesforce Ventures
Largest AI round ever, validates continued investment in foundation model development despite competition
AI Foundation ModelsSeries D • Lead: Tiger Global • Others: Breakthrough Energy Ventures, Temasek
Massive bet on fusion commercialization timeline; largest climate tech round of 2026
Climate TechSeries A • Lead: Index Ventures • Others: Greylock, Kleiner Perkins
New category creation around AI-native design tools post-Adobe deal collapse
AI-Powered Design ToolsAcquisition • Key investors: Accel, CapitalG, Sequoia
Robotic Process Automation consolidating as AI agents become more capable
IPO • Key investors: General Catalyst, Bessemer, Blackbird
Consumer creativity tools remain valuable despite AI disruption concerns
AI infrastructure investment is a bubble that will burst by 2027
Most VCs see continued infrastructure needs driving growth
Reasoning: Compute will commoditize faster than expected; software-defined solutions will win over hardware
Their Bet: Avoiding AI infrastructure, doubling down on AI application layer companies