Private Market Update December 2025
When AI took over: How 2025 redefined the private market
If headlines were any indication, 2025 belonged to artificial intelligence (AI). But the numbers tell an even more compelling story: AI permeated the conversation, and its performance significantly contributed to overall returns of the private market. Private companies in the Forge AI thematic basket1 outpaced the broader market by a remarkable 2–3X depending on the benchmark. Even as the equal-weighted Forge Private Market Index (FPMI) and the cap-weighted Forge Accuidity Private Market Index (FAPMI) posted impressive gains of 85.9% and 53.1%, respectively, the AI basket outpaced them significantly and appreciated 165.9% through November.
What powered this surge? Funding – massive amounts of it. AI companies drew an outsized share of venture capital, taking in 67% of all mid- and late-stage fundraising tracked by Forge despite representing just 20% of companies.2 For these same companies, from 2023 to 2025, capital raised by AI companies grew from $8.4 billion to a staggering $94.6 billion (+1,024%), while non-AI company funding grew modestly from $38.4 billion to $47.6 billion (+24%).3
Much of that capital expansion can be attributed to infrastructure. The computing power required to train and deploy large language models (LLMs) demands massive investment in data centers, chips and energy. OpenAI has said it will spend $1.4 trillion (yes, with a “T”) over the next eight years;4 Anthropic plans to spend $50 billion to support its roadmap.5 Despite rapid revenue growth at foundational model developers, profitability remains elusive, meaning more capital must be raised to fuel their buildouts.6 Whether today’s spending spree transforms into sustainable business models remains one of the defining questions of the next several years.
Investors, meanwhile, have shown no hesitation in assigning lofty valuations. The ten highest valued AI companies have increased in valuation on average by 327% so far in 2025.7 A few emblematic headlines captured the tone of the year:
- OpenAI Completes Deal That Values It at $500 Billion – The New York Times8
- Anthropic valued in range of $350 billion following investment deal with Microsoft, Nvidia – CNBC9
- XAI in Talks to Raise $15 Billion at a $230 Billion Valuation – The Information10
- Databricks reportedly in talks to raise funding at a $130B+ valuation – TechCrunch11
- AI startup Cursor raises $2.3 billion funding round at $29.3 billion valuation – CNBC12
This momentum rippled directly into secondary markets trading behavior. Compared to 2022, AI-related private market trading activity on Forge during 2025 has increased significantly, by 3,860%, and 44% of 2025 secondary market trades to date have involved AI companies.13 Taken together, these figures underscore how AI has become the most significant sector contributing to private market returns and investor attention across the private market.
The number of AI companies attaining “megacorn status” is equally striking. Before 2025 there were only two private companies valued at $100 billion or more, one of which was an AI company (OpenAI).14 Today, that group has expanded to six, four of which are AI leaders: OpenAI, Anthropic, xAI, and Databricks.15 In total, it’s been an unprecedented year for the sector.
The private market continued its positive trend in November, but saw a divergence between indices
Forge’s broad-based private market indices were both positive in November, however they were mixed against the public market. The equal-weighted FPMI (+5.3%) was well ahead of the cap-weighted FAPMI (+0.1%). This allowed a slight edge to SPY (+0.2%) against FAPMI, while both FPMI and FAPMI outperformed QQQ (-1.6%).
FPMI received positive contributions from TAE Technologies (+125.0%), xAI (+86.8%), as well as Ramp (+42.3%). While FAPMI saw gains from Ramp and SpaceX (+16.3%) but was held back by publicly traded Circle (-37.1%) and Figma (-27.8%). Per its methodology, FAPMI holds publicly traded companies for up to 1-year, while FPMI removes companies after the first day of trading. More details that drove Forge’s private market indices’ performance include:
- Fusion power company TAE Technologies, which saw strong Forge Price appreciation as investors sought to be the beneficiaries of future energy needs for AI16
- xAI reportedly raised a $15 billion funding round at a $230 billion valuation17
- Ramp raised $300 million at a $32 billion valuation led by Lightspeed and had just three months earlier raised $500 million at a $22.5 billion valuation18
Despite the government shutdown bleeding into the first two weeks of November and its lingering effects on other sectors of the economy,19 the private market didn't flinch.
| Index | L1M | L3M | YTD | L12M |
| FPMI | 5.3% | 19.4% | 85.9% | 89.3% |
| FAPMI | 0.1% | 12.1% | 53.1% | 62.9% |
| SPY | 0.2% | 6.2% | 17.6% | 14.8% |
| QQQ | -1.6% | 8.7% | 21.6% | 22.1% |
Forge Data through 11/30/2025
November buy-side interest percentage softened modestly
The percentage of buy-side indications of interest (IOIs) as a percentage of total interest in the Forge marketplace decreased to 54% in November from 63% in October. While this is a significant one-month change, it is still well within the range for the past two years with a high of 74% in December 2024 and a low of 40% in November 2023.
Across the board, trade premiums declined
Trade premiums decreased slightly in all percentiles compared to October levels. While there was broad-based softening, this was intensified in some percentiles by the mix of companies traded in October vs. November rather than the same companies declining month over month. The most significant decrease was in the 90th percentile of companies traded which decreased to 44% from 78% in October. Other percentiles saw more modest declines, with the 50th percentile decreasing to -15% from -1% in October. In general, trade premiums/discounts tend to be volatile and often decrease significantly after reaching a near-term high.20
About the Author
Shane Larkin is a private market investment leader with extensive experience in private and public markets, combining a strong analytical foundation with a background in engineering and business. He has conducted in-depth due diligence across a range of sectors, leveraging his expertise in financial modeling, data analysis and market research. Shane holds an MBA from Cornell Johnson Graduate School of Management. Read more from Shane.
