Good day. The number of global mergers and acquisitions in venture last year reached its highest level since 2022, as companies rushed to get an edge in the artificial intelligence race.

According to annual data released by CB Insights, global mergers and acquisitions of private, venture-backed companies rose 6.4% in 2025, reaching more than 10,400. The total includes a nearly 10% surge in acquisitions in the second half of last year.

Activity was boosted by demand for artificial intelligence.

As a share of total global venture M&A activity, AI reached 7.5% in 2025, up from 4.9% in 2024, the data company said. Acquisitions of AI startups in the U.S. nearly doubled. Deals centered around agents, infrastructure and data, necessary ingredients for deploying AI at scale, said Jason Saltzman, head of insights for CB Insights.

“Incumbents are showing a massive appetite for M&A,” he said.  They’re “not trying to out-innovate startups, instead turning to acquisitions targeting tech and talent, plugging them into existing customer bases, and moving faster than startups can build distribution on their own.”

The strategy led to a significant increase in acquisitions valued at more than $100 million. CB Insights noted mega-round M&A deal count increased 26.7% from 2024 to 2025, and was the highest amount since 2021.

Saltzman says to expect that momentum to continue into 2026 as AI reshapes the landscape for infrastructure and workflows.

Explore more VC investing data. 

—Jon Leckie is the WSJ Pro data editor.

And now on to the news...

Trade-secret litigation heats up in AI. An AI startup that Palantir has sued for allegedly poaching its workers and stealing company secrets has denied the allegations and asserted in a legal filing Monday that Palantir is trying to “scare others away from leaving.”

• Percepta, an artificial-intelligence company launched by two ex-Palantir employees and owned by venture firm General Catalyst, disputed Palantir’s claims that it violated noncompetition agreements.
   
• Palantir’s litigation joins a wave of legal battles over trade secrets and anticompetitive behavior in the AI sector. Elon Musk’s xAI sued ex-employees and competitors for alleged infractions, while data-labeling startup Scale AI sued competitor Mercor and a former employee who left to work for Mercor for allegedly stealing trade secrets.

One of the Bay Area’s hottest startups is hiring like crazy. The catch? You have to be willing to train artificial intelligence to one day do your job as well as you can. Welcome to the next gig economy. Instead of driving for Uber or delivering Postmates, a new wave of workers is signing up to school AI. These white-collar contractors review and critique the output of the large language models that power chatbots and other AI tools.

• Not just anyone can work for Mercor, an AI startup valued at $10 billion. Applicants have to demonstrate their abilities in the interview process. And you might work on the same project for weeks or even months.

America’s AI boom is pushing the nation’s largest power-grid operator to the brink of a supply crisis.

• Sixty-seven million people in a 13-state region stretching from New Jersey to Kentucky get their power from a market operated by nonprofit PJM. So, too, do the many AI data centers springing up in Northern Virginia’s “Data Center Alley,” which have a bottomless appetite for electricity.
   
• Rates are going up for consumers. Older power plants are going out of service faster than new ones can be built. And the grid’s capacity is in danger of maxing out during periods of high demand, which could force PJM to call for rolling blackouts during heat waves or deep freezes to avoid damaging grid infrastructure.

Funds

Superorganism, a venture firm focusing on biodiversity, closed its debut fund with $25.9 million in commitments. To date, the firm has invested in 20 startups.

People

Lama Partners, a U.S.-Israeli early-stage investor focused on cybersecurity and AI, appointed Sharon Seemann as partner, marketing and platform. She previously served as partner and chief marketing officer at YL Ventures.

M13 promoted Morgan Blumberg to partner. She focuses on agentic workflow automation at the firm.

Onebrief, a Honolulu-based defense-tech startup, closed a $200 million Series D round at a post-money valuation of more than $2 billion. Battery Ventures and Sapphire Ventures led the round, which included participation from General Catalyst and others. Onebrief is using the funding to acquire Battle Road Digital, which applies gaming technology to defense and national security challenges.

JetZero, a Long Beach, Calif.-based startup developing the first commercial all-wing airplane, raised about $175 million in Series B funding led by B Capital.

Defense Unicorns, a San Antonio, Texas-based software delivery platform for national security mission systems, completed a $136 million Series B round led by Bain Capital.

Deepgram, a San Francisco-headquartered API platform for real-time voice AI, landed $130 million in Series C funding at a $1.3 billion valuation. AVP led the round, which included participation from Madrona, Citi Ventures and several others.

Osapiens, a Germany-based platform helping companies drive sustainable growth through AI-driven decision-making, secured $100 million in Series C funding led by Decarbonization Partners, valuing the company at over $1.1 billion.

WitnessAI, a Mountain View, Calif.-based AI security and governance platform for enterprises, secured a $58 million investment led by Sound Ventures.

Novee, an AI offensive security provider, launched from stealth with $51.5 million in total funding led by YL Ventures, Canaan Partners and Zeev Ventures’ Oren Zeev.

WithCoverage, a New York-based risk management platform helping businesses replace their traditional insurance brokers, secured $42 million in Series B financing. Sequoia Capital and Khosla Ventures led the round, which included contributions from 8VC and Crystal Venture Partners.

Depthfirst, a San Francisco-based AI-native security platform, nabbed $40 million in Series A funding. Accel led the round, which saw additional support from Alt Capital, BoxGroup and Liquid 2 Ventures.

Flip, a New York-headquartered startup that automates customer service calls for enterprise brands, grabbed $20 million in Series A funding co-led by Next Coast Ventures and Ridge Ventures.

IO River, a Boston-based platform enabling enterprises to operate distributed delivery infrastructures as one system, grabbed $20 million in Series A funding led by Venture Guides and New Era Capital Partners.

GrowthPal, a Singapore-headquartered startup using AI to streamline the M&A deal-sourcing process for companies, snagged a $2.6 million investment led by Ideaspring Capital.

• Netflix Wanted to Reinvent Live TV. It Hasn’t Been Easy.
   
• Former New York City Mayor Eric Adams’s NYC Token Plummets After $1 Million Drawdown
   
• Trump Praises Microsoft’s Pledge to Lower AI-Linked Electricity Costs
   
• Vanderbilt University Plans New Campus in San Francisco
   
• Pentagon Investing $1 Billion in L3Harris’s Rocket Motor Business

• Meet the new biologists treating LLMs like aliens (MIT Technology Review) 

This newsletter was compiled by Yuliya Chernova and Zachary Cole.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

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