US vs. Global AI Private Equity Activity
- Brandon Chicotsky
- Dec 31, 2025
- 10 min read
Updated: Jan 16
Private equity in AI is booming, with the US leading in both deal volume and value. By mid-2025, the US captured 47% of global AI deals and 83% of transaction value, driven by massive infrastructure investments like data centers and energy resources. Globally, regions like Europe and Asia are focusing on healthcare, cybersecurity, and state-backed initiatives, but they face challenges like limited computing capacity and fewer IPO opportunities.
Key points:
US dominance: $300.2B in PE investments by Q3 2025, focusing on infrastructure and mega-rounds.
Global focus: European and Asian markets target late-stage deals, healthcare, and defense.
Challenges: US struggles with energy demands; global markets face valuation and infrastructure gaps.
Region | Share of AI Deal Volume (H1 2025) | Share of AI Deal Value (H1 2025) |
United States | 47% | 83% |
United Kingdom | 8% | 2% |
China | 4% | 2% |
The US excels in scale and exits, while global markets offer lower valuations and diversified opportunities.
1. US Private Equity Activity in AI
Investment Volume and Deal Size
The United States has firmly established itself as the leader in private equity funding for artificial intelligence, accounting for 79% of global AI sector funding in 2025 [5]. Total AI investment in the US jumped to $159 billion in 2025, up from $109.1 billion the year prior [5][7]. Interestingly, private equity (PE) has now overtaken venture capital (VC) in driving the largest deals - PE firms led rounds totaling $63 billion across roughly 300 deals, compared to $38 billion in VC-led deals [5].
A significant portion of AI funding has shifted toward mega-rounds, with 58% of deals involving investments of $500 million or more [5]. Median deal sizes reflect this trend, rising to $350 million for buyouts and $201 million for M&A transactions by the third quarter of 2025 [4]. Donald Zambarano, U.S. Head of Private Equity at KPMG, noted:
While deal volumes have declined significantly over the course of 2025, private equity deal flow has remained quite resilient as sponsors have focused on large, high-conviction transactions [4].
Sector Focus
Private equity firms in the US are taking a strategic "picks-and-shovels" approach, emphasizing AI infrastructure investments rather than directly funding volatile AI startups. In the first half of 2025 alone, infrastructure investments totaled $31 billion, driven by the growing need for data centers and energy resources [3]. The Technology, Media, and Telecommunications (TMT) sector led the way, attracting $285.9 billion in PE investments by Q3 2025 [4].
Some notable infrastructure deals highlight this trend. In December 2024, Blackstone and CPP Investments completed a $15.4 billion leveraged buyout of AirTrunk, a major data center operator [1]. Similarly, in Q2 2025, Blackstone Infrastructure acquired TXNM Energy for $11.5 billion, aiming to meet the rising energy demands fueled by AI growth [3]. Energy has become a key secondary sector, with firms like KKR and CPP Investments acquiring a 45% stake in Sempra Infrastructure for $10 billion, ensuring energy supply for AI-driven data centers [4].
Key Investment Strategies
US private equity firms are employing several strategies to maximize their returns in the AI sector. First, they're leveraging AI-driven sourcing engines that analyze large datasets to uncover investment opportunities based on measurable metrics and historical patterns [8][11]. Additionally, 84% of US PE firms have now appointed a Chief AI Officer, with 38% planning to allocate more than half of their business unit budgets to AI initiatives by 2026 [10].
A shift toward a "reimagine" mindset has also emerged. Instead of merely improving existing processes, top-performing firms are redesigning business models with AI, achieving benefits that are reportedly two to three times greater than traditional optimization approaches [10]. Timothy Tracy, EY Americas Private Equity Leader, remarked:
The debate over adoption is over; the race now is about how you create differentiation and not just 'get to average' [10].
Add-on acquisitions have become another dominant strategy, with US add-on deals reaching $267.6 billion by Q3 2025, putting the market on track to break annual records [4]. These acquisitions are helping firms integrate AI capabilities into their portfolios, enabling legacy businesses to compete with AI-native disruptors [1][4].
Growth Trends and Drivers
The focus of AI investments has shifted from developing foundational large language models to "Agentic AI" - software designed to autonomously handle complex business tasks with minimal human input [1][6]. Brett Klein, Head of East Coast Technology Banking at Morgan Stanley, explained:
With sophisticated reasoning and adaptive learning, agentic AI will be able to make decisions and take actions to achieve business goals with minimal human intervention [1].
There's also been a rise in talent-centric M&A, with companies using "acqui-hires" to bring in skilled professionals, often including talent retention clauses in their deals [6]. Additionally, 76% of AI use cases in 2025 were purchased as ready-made solutions rather than developed in-house, up from 53% in 2024, reflecting businesses' growing preference for pre-built AI tools [9].
2. Global Private Equity Activity in AI
Investment Volume and Deal Size
In the first half of 2025, the United States led global private equity activity in AI, but international markets showed notable progress. The United Kingdom and China stood out as key non-US players, each accounting for about 2% of global deal value, despite representing 8% and 4% of deal volume, respectively[1]. This contrast highlights the distinct priorities shaping regional investments.
A significant shift came from Sovereign Wealth Funds, particularly in the Middle East. These funds poured $46 billion into AI ventures in 2025, signaling a drive to establish self-reliant tech ecosystems. Simon MacAllister, Partner and Co-Head of Geopolitical Strategy at EY Ireland, emphasized the urgency:
AI is now viewed as critical for both economic resilience and national security, and countries are racing to secure compute, data and models, creating unprecedented demand across the AI value chain[12].
Sector Focus
While US investors leaned toward large-scale infrastructure deals, European and Asian investors diversified their focus across sectors like cybersecurity, healthcare, and defense. This infrastructure-first approach aligns with regional priorities, offering protection against trade uncertainties and supporting national security goals. In the Europe, Middle East, and Africa (EMA) region, private equity deal value reached $474.2 billion through Q3 2025, with $42.5 billion directed toward healthcare alone[2][13].
Notable deals outside the US included InfraVia Capital Partners' $900 million leveraged buyout of French data center firm OpCore in March 2025, and KKR and Singtel's $1.3 billion investment in Singapore-based ST Telemedia Global Data Centres in June 2024[1]. European AI investments hit a record €11.2 billion (around $11.7 billion) in 2024, with valuations slightly lower than their US counterparts, as measured by EV/EBITDA multiples[13].
Key Investment Strategies
Private equity firms globally are increasingly targeting take-private deals, especially in Europe, where AI company valuations remain appealing. For instance, Thoma Bravo acquired UK-based cybersecurity firm Darktrace for $5.3 billion in October 2024, highlighting the demand for mature European AI assets[13]. Similarly, FTV Capital completed a leveraged buyout of Windward, a UK-based AI maritime intelligence firm, for £216 million (approximately $266 million) in December 2024[13].
Geopolitical and supply chain concerns are driving a shift toward regional investments. Sovereign Wealth Funds, meanwhile, are doubling down on building localized AI ecosystems. A prime example is China’s National Artificial Intelligence Industry Guidance Fund, which closed with $8.2 billion in January 2025, led by Guozhi Investment, to fuel domestic innovation[1]. These trends point to a growing preference for late-stage, high-conviction investments.
Growth Trends and Drivers
The global AI investment landscape has shifted its focus to late-stage, large-scale deals, moving away from early-stage experimentation. North America accounted for 97% of the $87 billion in global Generative AI venture investment value during the first 11 months of 2025, even as other regions carved out specialized niches[12]. In March 2025, French AI startup Mistral AI raised $2 billion in a Series C round, achieving a valuation of $12 billion. This milestone underscores Europe’s ability to produce globally competitive AI platforms[12].
The focus on infrastructure has also driven demand for data centers, with private equity deal values in this area surging by 52% in 2024 and maintaining strong momentum into 2025[1].
Region | Share of AI Deal Volume (H1 2025) | Share of AI Deal Value (H1 2025) |
United States | 47% | 83% |
United Kingdom | 8% | 2% |
China | 4% | 2% |
Pros and Cons
AI private equity (PE) investments in the US and global markets each come with their own set of advantages and challenges.
US investors benefit from unmatched scale and infrastructure. The United States dominates the global AI landscape, controlling 74% of high-end AI supercomputing capacity and housing over 4,000 data centers - far outpacing the EU's approximately 2,250 facilities[14]. In H1 2025, US PE exits surged to $318.97 billion, with IPO values nearly doubling those of 2024[3].
However, the US faces significant energy and regulatory hurdles. Data centers in the US account for 8.9% of the country’s energy consumption, creating a bottleneck for growth[14]. Compounding this, US power generation lags behind China, and shifting trade policies - such as the "Liberation Day" tariffs introduced in 2025 - have added regulatory uncertainty, prompting some firms to delay investment decisions[3].
While the US wrestles with these issues, global markets are leveraging diversification to stay competitive.
Global investors benefit from lower valuations and broader sector opportunities. In 2024, European AI investments reached a record €11.2 billion (around $11.7 billion), with median buyout valuations sitting 0.5 EV/EBITDA points below those in the US[13]. Deals like Thoma Bravo's $5.3 billion acquisition of UK-based Darktrace in October 2024 highlight how investors can secure mature AI assets at more appealing prices[13]. Additionally, Middle Eastern sovereign funds invested $46 billion in 2025 to establish self-reliant tech ecosystems[12].
However, global markets face infrastructure and expertise challenges. Many advanced economies outside the US struggle with limited computing capacity and shortages in AI-specific expertise. For instance, the EU added just 1.6 gigawatts of data center capacity in 2024 compared to the US's 5.8 gigawatts, with the UK contributing only 0.2 gigawatts[14]. Moreover, IPO opportunities remain scarce outside the US, forcing investors to rely on strategic sales, which limits exit options. As Sarah Sipilä, Head of Private Equity at KPMG Finland, remarked:
The IPO door has remained firmly shut in the EMA region - outside of India's outlier market - with very limited deals managing to occur[2].
Market | Key Advantages | Primary Challenges |
United States | Dominates compute capacity (74% global share); $318.97B in PE exits (H1 2025); IPO values nearly doubled 2024 totals [1][3][14] | Energy grid strain (8.9% of US power use); regulatory uncertainty; power generation lags China [3][14] |
Global Markets | Lower valuations (0.5 EV/EBITDA points below US); $46B in sovereign investments; broader sector focus [12][13] | Limited computing capacity; restricted IPO access; significant AI skills shortage; EU added only 1.6 GW vs. US's 5.8 GW [2][14] |
Conclusion
The U.S. and global AI private equity markets are carving out distinct paths, each shaped by unique priorities and challenges. In the U.S., investors are leaning heavily into AI infrastructure - think data centers and energy assets - as a safer way to ride the AI wave. This "picks-and-shovels" strategy focuses on the backbone of AI rather than taking high-stakes bets on individual platforms [1].
Globally, the approach is more opportunistic. Lower valuations and a wider range of sector opportunities are drawing attention, particularly in Europe. For instance, AI deal value in Europe surged to €11.2 billion in 2024, with U.S. investors involved in nearly 20% of private equity deals there [13]. These differences highlight how regional strategies are evolving and influencing market trends.
Geopolitical pressures and trade uncertainties are also pushing firms to focus on domestic or regional investments, especially in critical areas like technology and healthcare. This shift is evident in how companies approach exits. In the U.S., IPOs brought in $91.6 billion during the first half of 2025 - nearly double the total for all of 2024 [3]. Meanwhile, in Europe, IPO activity has slowed considerably, with most exits happening through strategic acquisitions [2].
As these regional strategies continue to diverge, competition for AI infrastructure is expected to heat up, creating opportunities for geographic arbitrage. The key to success will likely lie in balancing the U.S.’s scale advantages with the valuation opportunities abroad, all while staying agile in the face of rapid AI advancements and shifting trade policies.
FAQs
Why does the US dominate private equity investments in AI and machine learning?
The United States stands at the forefront of private equity investments in AI and machine learning, thanks to its abundant capital and strong drive for technological advancement. In Q3 2025, the Americas secured an impressive $322.9 billion in private equity funding, with a staggering $300.2 billion originating from the US. A major contributor to this figure was a $56.4 billion deal involving Electronic Arts.
The country’s robust AI startup scene also plays a key role, drawing in substantial funding rounds. This dynamic ecosystem, paired with unwavering investor confidence in AI and machine learning, solidifies the US's position as a global powerhouse in this field.
How do private equity investments in AI differ between the U.S. and global markets like Europe and Asia?
Private equity investments in AI within the U.S. have outpaced Europe and Asia by a wide margin, both in terms of scale and strategic direction. Between 2013 and 2024, cumulative private AI investments in the U.S. hit a staggering $470 billion. In comparison, the EU countries collectively reached $50 billion, the U.K. managed $28 billion, and Japan saw only $6 billion. In 2024 alone, the U.S. recorded $109.1 billion in private AI funding - an amount nearly twelve times greater than China’s $9.3 billion. This dominance is fueled by the U.S.’s deep capital reserves and a concentrated focus on large-scale infrastructure projects, such as data centers and semiconductor supply chains.
In Europe, the landscape looks different. Markets here lean heavily on public-sector support and are still in the process of scaling early-stage startups. Interestingly, U.S. investors are increasingly contributing to European deal flow. However, European firms tend to prioritize regulatory compliance and benefit from initiatives like the EU’s €2.1 billion Digital Europe fund. Meanwhile, Asia’s private equity activity is more restrained and often tied to government-led programs. The focus in this region leans more toward capturing domestic markets and fostering strategic partnerships, contrasting with the venture-driven approach that dominates in the U.S.
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What challenges do global markets face in AI private equity compared to the U.S.?
Global private equity markets centered on AI are grappling with challenges that are less pronounced in the U.S. Geopolitical tensions and uncertainty around trade policies make cross-border investments both costlier and riskier. On top of that, global fundraising has taken a sharp hit, with private equity capital commitments sinking to their lowest point in nearly ten years. Rising interest rates are also driving up the cost of leverage, while limited exit options - like a decline in IPOs or strategic acquisitions - further complicate the landscape.
Meanwhile, the U.S. stands out as a leader in AI private equity, commanding a substantial portion of global investment. The country benefits from a mature AI ecosystem, a larger and highly skilled talent pool, and strong backing from both government initiatives and corporate investments in AI infrastructure. These strengths give U.S. investors an edge, enabling them to tackle challenges more effectively and sustain healthy deal activity, even amid broader economic headwinds.
