CB Insights' quarterly State of AI report tracks AI funding, M&A, and product trends using the firm's deal database. The Q2 2026 edition found AI funding posting its second-highest quarter on record, with $100 million-plus mega-rounds accounting for 94% of total funding, up from 80% the previous quarter, pushing the year-to-date average deal size above $160 million, more than four times 2025's full-year average of $38 million.
The report also flagged physical AI, covering robotics, defense technology, and autonomous systems, as a fast-emerging category, with 11% of all AI deals going to companies in the space and physical AI entering CB Insights' AI 100 list as a standalone category for the first time. AI-related M&A surged 90% year over year in the same window, with acquirers' average time-to-exit nearly halving compared with the broader AI M&A market.