Global Gold | Why the 2025 VC Mega-Deal Concentration Reinforces the Case for International Investing
PitchBook’s Q4 2025 Analyst Note has confirmed what many of us, both investors and founders, have felt over the past 12 months: the startup capital markets are becoming increasingly concentrated around artificial intelligence. This has real consequences for founders outside the AI hype cycle. I’ve spoken with numerous founders in my own networks who are building valuable, differentiated businesses but struggling to raise capital precisely because they are not AI-first. These founders are being penalized for not chasing the current narrative and not for lack of market quality.
AI megadeals are absorbing a massive share of total U.S. venture dollars, PitchBook reports in Q3 27% or $97.7 billion dollars went to just 10 deals. This means fewer companies are capturing a larger percentage of capital than ever before. Deal counts have fallen, yet total dollars deployed remain high because so much capital is flowing into the very top of the market. The market is creating a feedback loop where capital follows brand-name companies (OpenAI, Anthropic, Databricks), attention consolidates and early stage appetite narrows.
This trend isn’t limited to private markets. The concentration theme is visible in public markets as well. By some measures, the largest companies in the S&P 500 now represent an outsized share of total market value, underscoring how capital tends to gravitate toward the perceived “sure bets.” As long as private capital feeds the narrative that bigger is better, public markets will likely reflect that skew.
This mounting concentration around one sector and a handful of companies is exactly why we should be thinking seriously about diversifying our investment lens beyond the United States.
Concentration Creates Blind Spots
When the world’s deepest VC market becomes structurally concentrated, investors risk overweighting the same narratives, the same founders, and the same technology clusters. Meanwhile, entire ecosystems full of capable founders solving real, painful, locally-relevant problems, receive a fraction of the attention and capital.
Where Global Opportunities Are Emerging
When I talk about investing internationally, I am particularly focused on Latin America, Southeast Asia, Africa, and the Middle East. These regions share a few important characteristics:
1. Structural inefficiencies create real opportunity
Large populations, underserved markets, and legacy infrastructure gaps create fertile ground for founders building fintech, logistics, healthtech, climate, and B2B enablement solutions. The problems are large, urgent, and unavoidable.
2. Digital adoption is accelerating fast
Mobile-first consumers, open banking frameworks, and cloud-driven enterprise adoption mean startups can scale more efficiently than ever.
3. Capital depth is still developing
Unlike the United States where competition drives valuations up quickly, many of these markets still price risk more rationally. That means earlier entry points and meaningful ownership outcomes when companies win.
And importantly…
4. Founders here build differently
Constraint breeds discipline. Many founders in Latin America, Southeast Asia, Africa, and the Middle East build with profitability in mind much earlier, because capital has historically been harder to secure. That often produces fundamentally stronger operating cultures.
This Is Diversification
To be clear, the United States remains the world’s strongest startup ecosystem. But when AI megadeals dominate the top of the market, investors concentrating only in U.S. ventures are taking on systemic concentration risk and not just company-level risk.
Geographic diversification is simply good portfolio construction. It broadens exposure, reduces correlation and it increases the probability of discovering undervalued innovation.