a16z ‘State Of Markets’ Report: 55% Of AI Growth Concentrated In Private Markets, Limiting Access For Ordinary Investors

by
Alisa Davidson

Revealed: January 23, 2026 at 9:30 am Up to date: January 23, 2026 at 8:59 am

by Ana

Edited and fact-checked:
January 23, 2026 at 9:30 am

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Andreessen Horowitz (a16z) has launched its newest “State of Markets” report, providing a sweeping evaluation of the present AI panorama and its implications for traders, enterprises, and the broader know-how ecosystem. 

The report highlights the rising focus of worth inside a small group of personal firms, stating that roughly two-thirds of income among the many prime 50 non-public AI corporations comes from a16z portfolio firms, producing $26.5 billion in contrast with $14.1 billion from all different gamers. 

Public markets have equally mirrored this dominance, with AI shares accounting for about 78% of S&P 500 returns since November 2022, whereas non-AI equities gained solely 26%. 

This efficiency displays a shift towards profit-driven development fairly than speculative enlargement, with valuation multiples remaining regular or barely contracting, a stark departure from the unprofitable development tendencies of 2021–2022.

The report additionally examines the infrastructure powering AI growth and questions of potential market overheating. Opposite to earlier cycles characterised by unprofitable startups burning enterprise capital, funding at present is being pushed by traditionally worthwhile know-how giants allocating substantial parts of income—between 30% and 65%—to capital expenditures. In some instances, hyperscalers’ spending might attain 75% of working money circulate in 2026. 

Whereas a16z acknowledges the chance of excessive focus available in the market, the agency contends that basic circumstances differ from earlier know-how bubbles. Legacy {hardware} stays absolutely utilized, and seven- to eight-year-old TPUs function at full capability, whereas demand continues to exceed provide. The so-called Jevons paradox is clear, as cheaper tokens and processing models drive rising consumption, with GPUs regularly operating above 80% utilization.

Non-public Markets Seize Majority Of Progress And High Unicorns Dominate Worth Creation

Monetization methods are advancing quick, notably in software-as-a-service (SaaS) platforms. Salesforce Agentforce has reached $100 million in annual recurring income, and DocuSign’s Clever Settlement Administration platform has grown greater than fivefold in a single 12 months, from $75 million to $400 million ARR. 

Throughout the board, AI-driven merchandise are producing income by way of subscriptions, consumption-based credit, and agentic capabilities, illustrating the breadth of business adoption. The potential scale of the AI market is staggering; Goldman Sachs estimates as much as $9 trillion in income from AI infrastructure alone. 

With US company software program spending at $300–350 billion, representing about 1% of GDP, and white-collar wages exceeding $6 trillion, roughly 20% of GDP, AI’s financial influence extends far past software program, focusing on labor productiveness and workflow automation.

The non-public market continues to play a dominant function in worth creation. Firms are remaining non-public for longer intervals, typically rising from $1 billion to $5–6 billion earlier than going public. 

The vast majority of development happens previous to IPOs, concentrated within the fingers of enterprise capital, non-public fairness, and enormous institutional traders. This dynamic signifies that 55% of worth is created in non-public markets, leaving public traders entry to solely 45% of development alternatives. 

Energy legal guidelines are additionally intensifying, with the highest 10 unicorns—together with SpaceX, OpenAI, xAI, Anthropic, Databricks, Stripe, Revolut, Scale, Waymo, and Checkout.com—accounting for 38% of the mixed valuation of North American and European unicorns, illustrating how market winners are capturing a disproportionately massive share of worth.

Alisa, a devoted journalist on the MPost, focuses on cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a eager eye for rising tendencies and applied sciences, she delivers complete protection to tell and interact readers within the ever-evolving panorama of digital finance.

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