STARTUPS & MONEY

220 Fallen Unicorns. $250 Billion Into AI. The Venture Market Has Split in Two.

Alex Rivera · Startups & Money · June 2, 2026

The math is simple. AI companies captured 81% of global venture funding in Q1 2026 — more than $240 billion in three months. OpenAI’s $122 billion March round alone was 46% of all US deal value. And the startups that built their businesses before ChatGPT arrived in late 2022? They’re worth 68% less on average than their last funding round.

This isn’t a market correction. It’s a bifurcation. On one side: a tiny group of AI giants — Anthropic, OpenAI, SpaceX — absorbing more capital than entire venture vintages. On the other: more than 220 one-time unicorns now classified as “fallen” by PitchBook, including Glossier, Savage X Fenty, and The Farmer’s Dog.

Here’s how the venture market split in two — and who’s actually winning.

The venture capital market has split in two — AI-native startups vs everyone else. | Source: Pexels

01 — The Great Bifurcation: Why 2021 Valuations Are a Mirage

PitchBook’s latest data tells a brutal story. Startups that last raised in 2021 — the peak of the pandemic-era venture boom — are now worth 68% less on average. Those that raised in 2022 have seen valuations decline 52%. More than 220 companies that once hit billion-dollar valuations are now classified as “fallen unicorns,” according to CNBC.

The list is striking. Glossier, valued at $1.8 billion at its 2021 peak. Savage X Fenty, $1 billion in 2022. The Farmer’s Dog, $2 billion in 2021. AG1, the supplement brand, raised at a $1.2 billion valuation that same year. All are now “fallen unicorns” — private companies whose valuations have collapsed relative to their last raise, with no clear path back.

The culprit isn’t poor execution. It’s that the entire funding ecosystem has been rewired by AI. When OpenAI can absorb $122 billion in a single round — more than the total US venture market raised in any full year before 2018 — there’s simply not enough capital left for everyone else.

02 — Where the Money Actually Went

The concentration is staggering. OpenAI’s $122 billion March round — the largest private funding round in history — represented nearly 46% of all US venture deal value in Q1. Anthropic followed with a $65 billion raise in May at a $965 billion valuation, vaulting past OpenAI to become the most valuable private AI startup according to CNBC.

PitchBook’s baseline forecast projects North American VC assets under management growing from $1.5 trillion at the end of 2025 to $2 trillion by 2030 — a modest 30% rise over five years at a 5.4% CAGR. That’s important context: the current funding frenzy is front-loaded, not structural.

Meanwhile, chip manufacturer investments are quietly becoming a major force. Anthropic’s round included direct participation from chip makers — a signal that the AI funding race is evolving into a battle for compute infrastructure. Amazon’s $25 billion commitment to Anthropic, in exchange for over $100 billion in AWS spend over 10 years, is the template Reuters reported.

03 — The Survivors: Who’s Thriving in AI’s Wake

Not every startup is dying. Some are riding AI’s coattails — and doing it brilliantly.

Take Corgi, the AI insurance platform. The two-year-old startup founded by 26-year-old Nico Laqua raised $160 million in a Series B at a $1.3 billion valuation — then doubled to $2.6 billion three weeks later in a follow-on round Forbes reported. The company was already profitable.

Or look at Stord, the Atlanta-based fulfilment startup. It survived the post-pandemic VC winter, raised $200 million in 2025 at a $1.5 billion valuation, and then doubled again to $250 million at $3 billion after adding an AI interface to its warehouse management software TechCrunch reported.

The pattern is clear: AI-native startups are pulling away, and non-AI startups that aggressively integrate AI are the only ones keeping pace. Everyone else is in no-man’s-land.

The current AI funding frenzy is front-loaded, not structural — PitchBook forecasts just 30% AUM growth through 2030. | Source: Pexels

04 — The Coming IPO Test: Can Markets Absorb $4 Trillion?

PitchBook calls it “a trillion-dollar test for venture capital.” Anthropic, OpenAI, and SpaceX are all preparing to go public in the same year — deals that could collectively raise $200 billion and add $4 trillion to American stock market capitalisation The Economist reports.

Anthropic filed confidentially on June 1. OpenAI is expected to follow. SpaceX is reportedly targeting a $1.8 trillion valuation. There has never been a moment this consequential for venture capital, because in a normal year, three massive listings would not determine the fate of an entire asset class. In 2026, they might.

05 — What the Next 12 Months Look Like

Here’s the blunt prediction. The AI mega-cap startups — Anthropic, OpenAI, SpaceX — will go public between now and mid-2027. Their IPOs will be the largest in history, and they’ll absorb a staggering share of public market attention and institutional capital.

The pre-ChatGPT cohort — the fallen unicorns — will continue declining. Some will get acquired at a fraction of their peak valuations. Others will restructure, cut costs, and try to reach profitability without additional venture funding. Many will simply run out of money.

The AI-native mid-cap startups — the Corgis and Stords of the world — are the ones to watch. They’ve proven product-market fit in real industries, with real revenue, at valuations that still leave room for public-market upside. These are the companies that will define the next generation of tech IPOs.

The math is simple: AI is the gravity well. Everything else is in free fall.