Family offices make fewer deals but still flock to AI startup mega-rounds

Family offices are significantly reducing the volume of direct investments, with October seeing a 63% annual decline, yet they are increasingly channeling capital into larger, high-value deals, particularly within the artificial intelligence sector. A PwC report indicates that while deal count fell 23% in H1 2025, deal value only dropped 18%, with AI/ML investment value nearly tripling to $123.3 billion. This strategic shift towards fewer, larger bets, exemplified by multi-billion dollar AI rounds, underscores family offices' pursuit of greater returns and their evolving role as major players in the global deals landscape.

Analysis

Family offices are significantly reducing the volume of direct investments, with October witnessing a 63% year-over-year decline to 51 deals, according to Fintrx data. Despite this reduction in deal count, the aggregate deal value has shown resilience, with PwC reporting only an 18% decrease in the first half of 2025 compared to a 23% drop in deal numbers, indicating a strategic pivot towards fewer, larger investment rounds.

A primary driver of this sustained deal value is the robust allocation to artificial intelligence companies. In the first half of this year, family office investment value in AI and machine learning nearly tripled to $123.3 billion, even as the number of deals remained consistent with 2023 levels. Notable examples include the Winklevoss firm's participation in a $1.4 billion Series E for Crusoe and Hillspire's involvement in a $2 billion Series B for Reflection.

This trend towards larger deals is not solely AI-driven but represents a decade-long strategic evolution, with the proportion of investments exceeding $100 million increasing from 9% to 15%. Family offices are increasingly seeking bigger returns and asserting themselves as major players in the global deals landscape, as evidenced by the shrinking share of investments below $25 million from 70% to 59%. This reflects a sophisticated approach to capital deployment.

Key Decisions for Investors

• Investors should monitor the continued concentration of private capital into larger, high-value deals, particularly within the artificial intelligence sector, as this trend reflects sophisticated investor sentiment.
• Evaluate portfolio exposure to AI and machine learning, considering the significant capital inflows and rising valuations in the private markets, which may signal future public market opportunities or competitive pressures.
• Consider the implications of family offices' long-term shift away from smaller deals, which may suggest a higher bar for early-stage investments and a preference for more mature, capital-intensive growth opportunities.