Venture Capital Intelligence Report
February 12, 2026 • Synthesizing insights from top-tier VCs
VCs are seeing a bifurcated market - AI infrastructure and vertical AI applications remain hot, while consumer tech and speculative categories face continued headwinds. The recent 2-3% pullback in major tech stocks reflects concerns about AI capex sustainability, but fundamentals remain strong.
Series A crunch continues with higher bars for traction. Pre-seed/seed relatively healthy for AI companies. Growth rounds require clear path to profitability. Dry powder exists but deployment is selective.
Down 40-60% from 2021 peaks but stabilizing. AI companies command premiums. Enterprise SaaS multiples compressed to 8-12x revenue vs 20x+ in 2021. Quality companies with strong unit economics finding fair pricing.
The picks-and-shovels play for AI remains compelling. Inference costs must drop 100x for widespread AI adoption. Custom silicon, inference optimization, and model serving infrastructure are critical bottlenecks.
Horizontal AI tools hit adoption limits. The real value is in domain-specific AI that understands industry workflows, data, and compliance requirements. These can charge premium pricing and have natural moats.
IRA funding catalyzed real deployment. Grid infrastructure, energy storage, and industrial decarbonization seeing genuine traction. Corporate procurement commitments provide revenue visibility.
Geopolitical tensions drive defense spending. Software-defined capabilities, autonomous systems, and dual-use technologies offer venture-style returns with government contract visibility.
AI-first development requires new toolchains. Traditional CI/CD, monitoring, and security tools need complete reimagining for AI/ML workflows. Large developer TAM with high willingness to pay.
Banking infrastructure modernization accelerating. Embedded finance and programmable money creating new business models. Crypto rails maturing for institutional adoption.
The next decade will be defined by rebuilding core infrastructure for an AI-native world, not building AI applications on legacy infrastructure
Post-ZIRP environment rewards companies that can do more with less - AI automation, process optimization, and resource efficiency are the new growth drivers
Climate transition creates the largest infrastructure investment opportunity since the internet, with AI acceleration enabling previously impossible solutions
The future of work isn't human-AI collaboration but AI agents that can operate independently across complex enterprise workflows
Europe's regulatory-first approach to AI will create unique moats for European AI companies, especially in privacy-preserving and explainable AI
AI agents that can perform complex multi-step tasks autonomously, replacing entire job functions rather than just assisting humans
LLMs reached capability threshold for reliable task completion, enterprises desperate for efficiency gains in tight labor market
$4T knowledge worker productivity market
Early signals from: Greylock, a16z, General Catalyst
Companies to watch: Adept, Rabbit, Multi-On
Brain-computer interfaces moving from medical to consumer applications, enabled by non-invasive neural signal processing
AI can decode neural patterns without invasive surgery, consumer AR/VR adoption creating demand for hands-free input
$100B human-computer interaction market
Early signals from: Lux Capital, Founders Fund, Khosla Ventures
Companies to watch: Neuralink, Synchron, Kernel
Using synthetic biology and AI to manufacture materials, chemicals, and pharmaceuticals in biological systems
AI dramatically reduces biological design cycles, sustainability regulations favor bio-based manufacturing
$2T chemicals and materials market
Early signals from: Andreessen Horowitz, Lux Capital, Fifty Years
Companies to watch: Ginkgo Bioworks, Zymergen, Modern Meadow
National and regional cloud infrastructure to reduce dependence on US hyperscalers, driven by data sovereignty concerns
Geopolitical tensions, regulatory requirements, latency needs for edge computing
$200B non-US cloud market
Early signals from: Index Ventures, Balderton Capital, Bessemer
Companies to watch: OVHcloud, Scaleway, Yandex Cloud
Previous: Red hot in 2020-2021 with TikTok competitors → Now: Significantly cooled
User acquisition costs skyrocketed, network effects favor incumbents, Gen Z engagement patterns stabilized around existing platforms
What Changed: iOS privacy changes destroyed attribution, AI content threatens authenticity, regulatory scrutiny increased
VCs Cautious: Benchmark, Greylock, General Catalyst
Previous: Pandemic e-commerce boom drove massive investment → Now: Broad-based retreat
CAC/LTV ratios deteriorated, supply chain normalization, return to physical retail
What Changed: iOS 14.5 killed Facebook ads arbitrage, inflation squeezed margins, consumer spending shifted to services
VCs Cautious: Forerunner, General Catalyst, Bessemer
Previous: iBuyer and rental tech attracted billions → Now: Massively scaled back
Interest rate sensitivity exposed business models, regulatory pushback on algorithmic pricing
What Changed: Rising rates killed iBuyer margins, rent control legislation, over-digitization of inherently local business
VCs Cautious: Fifth Wall, Camber Creek, MetaProp
Focus on inference cost optimization over model accuracy improvements - a 10x inference cost reduction is worth more than 5% accuracy gain
💡 Build your product assuming inference costs drop 100x in next 3 years, optimize for scale not perfection
— Sequoia Capital
CIOs are buying AI solutions for compliance and risk reduction, not productivity gains - frame your pitch around risk mitigation
💡 Lead with security, governance, and auditability features in enterprise sales conversations
— Bessemer Venture Partners
Raise 18-24 months of runway minimum - the funding environment won't improve until late 2026, plan for extended runway
💡 Cut burn rate aggressively if you have less than 18 months runway, quality companies will find funding but on longer timelines
— Benchmark Capital
Top AI talent is becoming mercenary - offer equity packages that vest faster and include refresher grants
💡 Design compensation packages like FAANG companies - high cash, quarterly refreshers, and accelerated vesting
— Greylock Partners
Product-led growth is dead for B2B AI - enterprises want white-glove onboarding and dedicated success teams
💡 Budget 30-40% of revenue for customer success and professional services, especially in first 2 years
— Lightspeed Venture Partners
Series C • Lead: Google • Others: Spark Capital, Salesforce Ventures
Validates continued investment in frontier AI models despite cost concerns
Foundation ModelsSeries I • Lead: Andreessen Horowitz • Others: Insight Partners, Tiger Global
AI data preparation and training infrastructure commands premium valuations
Data Infrastructure