Global venture capital investment reached US$170.9 billion across 8,341 deals in the third quarter of 2026, as investors continued to back artificial intelligence at unprecedented levels despite geopolitical uncertainty, according to the Q3’26 edition of KPMG’s Venture Pulse, a quarterly report tracking venture capital activity in global and regional markets.
The report found that venture funding was on pace for one of its strongest years on record, with investment totalling US$728.3 billion in the first nine months of 2026. Corporate venture capital investment reached US$532.8 billion year-to-date, already surpassing the previous annual record.
The Americas continued to lead global VC investment, attracting $101.2 billion across 3,947 deals in the quarter, including $98.4 billion across 3,626 deals in the US. Asia attracted $39.8 billion across 2,698 deals, helped by a continued resurgence in China, which saw $27.2 billion in VC investment. Europe recorded a particularly strong quarter, with VC investment rising from $26.5 billion to $28.4 billion across 1,497 deals quarter-over-quarter, marking both Europe’s eighth straight quarter of increasing VC investment and a sixteen-quarter high.
AI was the dominant theme in global VC investment, drawing interest across foundation models, AI infrastructure and autonomous systems as well as physical AI and industry-specific applications. Large AI deals featured among the biggest funding rounds in every region, including a $5 billion raise by Databricks and a $3.9 billion raise by Crusoe, both in the US, a $3.5 billion raise by China-based Moonshot AI, and a $3.5 billion raise by France-based Mistral AI. Defencetech and renewable energy also attracted significant levels of investment.
Carolina Oliveira, Global Lead of Emerging Giants at KPMG International and Partner and Private Enterprise Leader at KPMG Brazil and South America Cluster, said: “The VC market globally continues to be quite bifurcated, with a lot of the investment going into top end deals, particularly in the AI space. Globally, we saw 14 funding rounds over $1.5 billion during Q3’26, including nine in the US. That’s a remarkable number – and a large part is due to AI.”
The report said the market is becoming increasingly concentrated around a relatively small number of large AI-related funding rounds. As investors continue to place outsize bets on AI models, infrastructure, data centres, robotics and defence technologies, startups outside these sectors are facing a more selective funding environment, highlighting a growing divide within the venture ecosystem.
In the Americas, AI accounted for 8 of the region’s largest 10 funding rounds, led by Databricks, Crusoe, and Cognition, which raised $2 billion, all US-based companies. AI accounted for five of Europe’s six $1 billion-plus funding rounds, led by Mistral AI, and Germany-based AI-powered defencetechs Helsing, which raised $1.8 billion, and Quantum Systems, which raised $1.2 billion. Asia saw five $1 billion-plus funding rounds, including raises by Moonshot AI, Kling AI, which raised $3 billion, and Australia-based Firmus Technologies, which raised $2 billion.
Outside the US, performance across the Americas was more mixed. Canada saw VC investment decline to $866.3 million, its lowest quarterly total since the third quarter of 2018, amid significant trade and tariff-related uncertainties. Mexico and Brazil both saw VC investment increase quarter-over-quarter, to $693 million and $609 million respectively. Across Latin America, fintech remained a key area of investment, particularly neobanks, while AI and data centre-related opportunities continued to gain attention.
In Europe, defencetech was a particular standout, with large raises by Helsing and Quantum Systems helping propel Germany to a fourth consecutive quarter of VC investment growth. Following several strong quarters, VC investment in the UK softened somewhat to $6.8 billion. The protracted softness in Europe’s exit environment, combined with significant selectivity on the part of VC investors, continued to shape investment trends across the region.
VC investment in Asia dipped from $44.6 billion in the second quarter of 2026 to $39.8 billion in the third quarter, although it remained the second-strongest quarter since 2022. The continued resurgence in China was driven by an improving macroeconomic environment, an increasingly active late-stage deal market, and robust secondary market activity. China’s AI market has also expanded rapidly, with investors increasingly funding enterprise AI solutions across healthcare, insurance, legal services and other industries, in addition to AI infrastructure, physical AI and robotics.
Japan saw $1.2 billion in VC investment during the quarter, a relatively steady result although investors were highly selective, while India saw investment fall to a six-quarter low of $2.6 billion.
Looking ahead to the fourth quarter of 2026, the report said global VC investment was expected to remain buoyant, with the broader AI ecosystem continuing to attract significant investment. Investment in AI infrastructure is expected to accelerate further, alongside physical AI, industrial AI and robotics, with momentum also expected to extend into defencetech, as governments prioritise AI-enabled autonomous systems and sovereign defence capabilities, and alternative energy, given rising global power demand driven by AI.
Oliveira added: “AI isn’t really a standalone investment theme anymore. It’s becoming embedded across almost every sector, from healthcare and financial services to manufacturing, defense, energy, and infrastructure. While there could be a bit of a slowdown in total investment given the midterms in the US during Q4’26, we expect that breadth of investment to continue into Q4’26, particularly as investors look for companies that can translate AI into real, measurable value.”
