S&P webinar: GenAI companies eye public markets after record private fundraising

➤ GenAI application companies raised a record $217.7 billion in the first half of 2026, double the total raised in the full year 2025.

➤ Private market fundraising is likely peaking as top-tier foundation model providers have tested the limits of private capital availability.

➤ Companies are turning to public markets not primarily for capital access but for strategic considerations, including credibility, liquidity and long-term growth acceleration.

GenAI companies are preparing to transition from private to public markets after breaking fundraising records in the first half of 2026, though significant challenges await them as public companies, experts said during an S&P Global Market Intelligence webinar.

Despite the sequential drop in funding in the June quarter, it still represented the second-strongest quarter in GenAI application fundraising ever after the March quarter. Indeed, in the first half of 2026, GenAI application companies raised a record $217.7 billion, double the total raised in full year 2025, said Iuri Struta, TMT reporter at Market Intelligence, during the GenAI Fundraising: From Private Rounds to Public Markets webinar.

"We believe this is very likely to be the peak transaction value for GenAI in private markets, at least for a period," Struta said. "A lot of these companies have already put to test private markets in terms of how much they can raise."

The massive concentration of funding has largely flowed to top-tier foundation model providers like OpenAI LLC and Anthropic PBC, Struta noted.

Hyperscaler spending drives infrastructure demand

Major technology companies are making unprecedented capital investments to support AI infrastructure, said Melissa Otto, head of research at Visible Alpha.

Capital expenditure by major tech companies has grown from about $80 billion in 2019 to about $700 billion in 2026 and is projected to reach $850 billion in 2027, Otto said. Between 2026 and 2027, hyperscalers are expected to spend $1.5 trillion on AI and digital infrastructure.

"The hyperscalers have very strong balance sheets," Otto said, noting that major tech companies, including Alphabet Inc., Microsoft Corp., Amazon.com Inc. and Meta Platforms Inc., have debt-to-equity ratios well below 1, indicating financial health. These companies have significant cash reserves, enabling substantial capital expenditure, she added.

The AI infrastructure build-out is also driving demand for AI memory products and power. "AI applications require significant memory, driving demand and price increases for memory products," Otto said, citing companies such as Samsung Electronics Co. Ltd., SK hynix Inc. and Micron Technology Inc. as beneficiaries.

Power consumption by US data centers has risen from low levels in 2018 to approximately 5% of total US annual consumption, with projections suggesting this could reach 14% to 20% by 2030, Otto noted.

Access the webinar here.

Strategic shift to public markets

The decision to go public is increasingly driven by strategic considerations rather than simply the need to raise cash, according to Shari Mager, national capital markets leader and partner at KPMG LLP.

"Access to capital is not really the primary reason for going public," Mager said. "Today's leading private companies have access to unprecedented levels of private funding, whether it's from venture capital, private equity, sovereign wealth funds or writing crossover investors."

Instead, companies are evaluating whether public markets will help them accelerate growth, enhance their credibility and provide broader access to capital over the long term, Mager said.

"The real question that they're asking themselves is, when do the benefits of going public start to outweigh the flexibility that they have if they remain private?" Mager said. "And I think those are the ones that we're seeing starting to get ready long before they need to make that decision, 'cause they're taking advantage of the optionality that the private markets give them today while evaluating the benefits of entering into the public markets."

Companies are already accessing both public and private capital markets to support large-scale AI investments and infrastructure buildouts, Mager said. "The scale of investment that's required to support AI growth is significant, and so the capital markets are playing an increasingly important role in funding that expansion," Mager said. "We're also seeing quite a bit of AI-related debt issuances."

Challenges for newly public companies

GenAI companies transitioning to public markets will face significant hurdles, particularly around proving return on investment and maintaining growth rates.

"There's going to be heightened pressure for AI companies to prove the ROI," Mager said. "Governance becomes a very strategic differentiator. And honestly, maintaining growth while they're public is probably going to be one of the more difficult asks of a newly public company compared to when it was private."

Mager emphasized that going public represents a fundamental shift in accountability. "What they need to remember is that going public is not a finish line. It's really the beginning of a new level of accountability," she said. "The ones that are gonna be successful are the ones that compare their innovation and growth with strong governance, transparency and, frankly, consistent execution."

Impact on other sectors

The concentration of funding in AI has had spillover effects on other technology sectors, particularly traditional software companies.

"The willingness to fund software and also, for example, fintech, another area that is non-AI, is very low now," Struta said. "This is happening in private markets. But private markets often take cues from public markets."

Struta noted that many software companies in public markets are not trading at valuations that would attract venture capital investors looking for high-growth opportunities. Traditional software companies face a "double whammy," according to Struta, with low growth rates and concerns about AI disruption.

However, Struta said some enterprise software may be more resilient because such systems become deeply embedded in company operations and are difficult to replace, meaning AI tools will likely be built on top of existing platforms rather than replacing them entirely.

– Access the Market Intelligence webinar replay portal. – Dive into Technology, Media and Telecommunications content with S&P Capital IQ Pro. – Access more TMT webinars.

Visible Alpha is a part of S&P Global Market Intelligence.

This content may be AI-assisted and is composed, reviewed, edited and approved by a human at S&P Global. S&P Global uses generative AI to create content in accordance with our Terms of Use.