AI megadeals dominate global VC flows; India absent from top funding trends: KPMG

Global venture capital funding surged sharply in the first quarter of 2026, driven overwhelmingly by multi-billion-dollar investments in artificial intelligence companies, even as India remained absent from the biggest funding trends, according to KPMG’s latest Venture Pulse report.

AI megadeals drive funding surge

Global VC investment more than doubled quarter-on-quarter to $330.9 billion across 8,464 deals in Q1 2026, compared with $128.6 billion in the preceding quarter.

The sharp increase was largely driven by a handful of outsized deals in the AI space. Five companies alone accounted for $188.6 billion of total funding, led by a record $122 billion raise by OpenAI, along with funding rounds by Anthropic ($30 billion) and xAI ($20 billion).

“Arguably, Q1’26 was the best quarter the global VC market has seen in quite a while, even normalizing for the big mega-deals,” said Conor Moore, Global Head of KPMG Private Enterprise. “A lot of companies are getting funded; they’re just getting overshadowed in many ways because everyone is focused on the big three.”

US dominates global capital flows

The report shows that the Americas accounted for 82% of global VC investment, with the US alone contributing $267.2 billion, highlighting the concentration of capital in one geography.

Europe and Asia saw comparatively modest funding at $25.7 billion and $33.6 billion respectively, despite multiple billion-dollar deals across sectors.

Artificial intelligence remained the dominant investment theme globally, spanning not just large language models but also adjacent segments such as semiconductors, data centres, autonomous vehicles and robotics.

India missing from key trends

Despite the surge in global funding, India did not feature among the major deals, regions or sectoral highlights identified in the report.

None of the top funding rounds listed for the quarter originated from India, and the country was absent from the key regional narratives around venture activity, even as China and Singapore saw billion-dollar transactions.

This suggests that while global capital flows are accelerating, they remain highly concentrated in late-stage, capital-intensive AI opportunities, limiting participation from markets currently witnessing smaller deal sizes and a more early-stage funding environment.

Risks cloud near-term outlook

The report also flagged emerging risks to the sustainability of the funding rebound, particularly geopolitical tensions.

A conflict in the Middle East towards the end of the quarter has introduced fresh uncertainty, with rising oil prices and inflation concerns weighing on investor sentiment.

“The last few weeks… are throwing a bit of a wrench into things, especially on the IPO front,” Moore said, noting that expectations of a steady pipeline of public listings are now “very much in doubt.”

While AI is expected to remain the dominant driver of venture capital flows globally, the report suggests that market momentum will depend on macro stability, particularly geopolitical developments and the trajectory of inflation.