AI Investment Trends & Insights Report H1 2025 | Ropes & Gray
Despite global market uncertainties, AI has emerged as a strategic priority for business executives, investors, and governments. Investments in AI infrastructure and dealmaking with AI developers and AI-enabled companies have continued to thrive. The geopolitical landscape has intensified competition among nations, with governments offering subsidies and incentives to foster AI innovation hubs such as Silicon Valley and Beijing. Ropes & Gray LLP highlights that private capital is a major driver of AI innovation, with venture capital (VC) and private equity (PE) firms actively funding emerging AI platforms.
In H1 2025, private capital fundraising for AI has decreased by 40% Year-over-Year, yet a substantial portion of this capital is designated for AI investments. Companies are increasingly acquiring AI firms to enhance their capabilities, as 40% of CEOs in a recent PwC survey indicated that failure to adapt could jeopardize their companies' survival in the next decade. Big Tech firms, such as Microsoft and Meta, are significantly investing in AI to integrate it across their operations.
M&A Activity in AI
Strategic M&A involving AI-related targets has shown strong momentum in H1 2025. Deal volume and value are projected to surpass previous years by 33% and 123%, respectively. Companies are making capability-driven acquisitions to enhance their product offerings and acquire key AI talent. Notable transactions include OpenAI's acquisition of io Products for $6.5 billion and Meta's investment of $14.3 billion in Scale AI.
Private Equity Investments in AI
Private equity activity in AI is on the rise, with 155 deals reported in H1 2025, a 49% increase from H1 2024. PE firms are focusing on mature companies with established use cases rather than early-stage startups. Investments in data infrastructure critical for AI deployment have been a priority, reflecting a strategic approach to mitigate risks while capitalizing on AI's growth potential.
Venture Capital Trends
Venture capital activity for AI-related rounds is projected to decline by 12% Year-over-Year. This slowdown is attributed to broader market conditions, yet AI investments are expected to exceed previous years. AI-related investments accounted for 51% of VC deal value in H1 2025, showcasing AI's growing prominence within the venture capital landscape.
Industry Insights on AI Adoption
In H1 2025, the Software & Services sector accounted for the majority of AI deal activity, comprising 54% of volume and 68% of value across M&A, PE, and VC transactions. The Healthcare & Life Sciences (HCLS) sector ranked second by volume but fourth in total value due to a higher number of smaller transactions. The Robotics & Hardware segment, although fourth by deal count, saw the second-highest total deal value.
Regional Analysis of AI Investments
The United States dominated AI deal volume and value in H1 2025, accounting for 47% of deal volume and 83% of total transaction value. The UK followed as the second highest in both volume (8%) and value (2%), while China ranked third with 4% of volume and 2% of value. The competitive landscape in AI is intensifying globally, with nations prioritizing AI development through supportive policies and investments.
Private Equity and AI Infrastructure
PE firms are increasingly investing in AI infrastructure, which has seen a significant uptick in deal value involving data center targets. The strategy is to capitalize on the burgeoning AI industry while mitigating risks associated with direct AI investments.
Notable AI Transactions in H1 2025
Significant M&A transactions this year include OpenAI's acquisition of iO for $6.5 billion and General Atlantic's acquisition of Esker for $1.7 billion. These moves reflect a broader trend of corporate repositioning where companies leverage M&A to enhance their competitive positioning in the AI landscape.
AI + Data Insights in the AEC Industry
The AEC industry is rapidly adopting AI technologies, driven by the need to improve efficiencies and integrate data governance. A recent survey by BST Global indicates that firms are focusing on the strategic implications of AI while addressing workforce impacts and the criticality of data governance.
The report outlines the current state of AI adoption, revealing insights into various applications of AI in the AEC sector and the associated challenges firms are facing.
