The Private Market Power Shift in AI

Growth equity is experiencing a powerful resurgence, driven by the transformative impact of AI across industries¹. For investors, the landscape is shifting rapidly: value is moving from public markets into the hands of private companies, creating new risks and even greater opportunities. In this article, we’ll walk you through five essential charts and infographics that reveal what’s happening in AI, why it matters for your portfolio, and what you need to pay attention to as a client. If you want to capture the upside of this new era, these are the trends you can’t afford to ignore.

1. The AI Value Creation Curve

Here’s what’s happening:

AI innovation doesn’t happen all at once—it unfolds in waves. First, the infrastructure is built (think chips and compute power), then platforms emerge (models, APIs), and finally, applications take off across industries². Each stage brings new players and new opportunities.

What it means for investors:

The balance of value capture has shifted dramatically. In the internet/cloud cycle, about 70% of value in the application layer accrued to public markets, but in the AI cycle, there is a meaningful chance the majority will accrue to private markets². That means the biggest growth stories are happening before companies ever hit the stock exchange. For investors, this is a fundamental change: access and timing are now more critical than ever.

2. Why AI Is a $15 Trillion Opportunity

Here’s what’s happening:

AI is not just a single technology—it’s a collection of massive growth engines. From autonomous agents and foundation models to sector-specific solutions and industrial automation, AI is driving change at every level of the economy.^3 4

What it means for investors:

The scale is staggering: analysts estimate AI could unlock $15 trillion in value globally. But where is this value being built—and who owns it? Understanding the segments of AI value helps you see where the next wave of winners will emerge, and where your portfolio can benefit most. Promising emerging AI sub-sectors, in our view, include:

• Agentic AI—Agents can be thought of as autonomous “digital employees” with the potential to automate over half of supply chain tasks by 2030.
• Horizontal AI software—AI has the potential to enable workflow automation across core business functions, such as customer relationship management (CRM) systems.
• Vertical AI software—AI cutting drug development timelines in half by improving productivity from drug discovery to clinical trials to regulatory processes.
• Industrial AI and automation—As part of a larger U.S. reindustrialization, industrial companies are expected to allocate 25%–30% of their capital expenditures to automation over the next five years, compared with just 15% average capex during the past five years.⁵

3. The Private Market Advantage

Here’s what’s happening:

Unlike previous tech booms, today’s AI leaders are staying private longer. IPO timelines have doubled since 2010, and top private firms are now valued on par with mid-cap public companies¹. This means the most innovative companies are building value away from the public eye.

What it means for investors:

Private market dominance means that traditional public market investing may miss out on the fastest-growing AI firms. For clients, this is a call to rethink how you access innovation—private equity and growth capital are now essential tools for capturing upside.

This private dominance has fueled a surge in AI investing activity—our next chart shows how quickly capital is flowing.

4. AI Deal Momentum

Here’s what’s happening:

Private AI deal volume has tripled since 2020, with software representing nearly half of all AI-related investments⁵. The pace of capital deployment is accelerating, as investors race to back the next generation of AI leaders.

What it means for investors:

A 200% growth in deal activity since 2020 signals a market in motion¹. If you’re not participating in private AI deals, you risk missing out on the most dynamic segment of the innovation economy. The data shows that growth equity is not just back—it’s leading the charge.

5. AI Across Industries

Here’s what’s happening:

AI is no longer confined to Silicon Valley or big tech. It’s transforming healthcare, defense, logistics, energy, and finance—unlocking new efficiencies and reshaping competitive advantage across the board⁶.

What it means for investors:

After a few muted years, private markets are again fertile ground for innovation and value creation. Growth equity is unlocking opportunities once reserved for the public markets, and AI is at the heart of this shift. Whether it’s faster drug discovery, smarter defense systems, resilient supply chains, or next-gen fintech, the impact is real—and investable⁷.

The AI revolution is happening now—and much of it is unfolding behind closed doors.

If your portfolio lacks exposure to private-market growth in AI, you may be missing the biggest upside.

To explore how to position for this new era of innovation, contact your J.P. Morgan team.