Citigroup Ups Focus on Privately-Held AI Startups

Citigroup is reportedly increasing its research efforts into private companies.

Heath Terry, a veteran of firms like Goldman Sachs, joined Citi to head coverage of the artificial intelligence industry and guide other analysts in researching private firms in other sectors, Bloomberg reported Wednesday (July 23).

The number of closely-held companies has risen while the number of public companies has shrunk, the report said. These firms are increasingly dominating AI and aerospace, which has made financial data in global markets more opaque and brought more attention to venture capital (VC) and private equity (PE) groups.

“This is one of — if not the single biggest — structural change in our markets over the last 10, 15 years,” Terry said, per the report. “This is just table stakes of being a research analyst in 2025.”

Nearly 1,500 startups around the world are valued at $1 billion or more, the report said, citing data from PitchBook.

“The number of VC- and PE-backed companies is up massively compared to what’s in the public arena,” said Citi Global Head of Research Lucy Baldwin, per the report. The bank aims to study “how different profit pools will be disrupted, and which companies will win or lose — whether that’s private or public.”

AI startup merger-and-acquisition deals have hit record levels of volume and valuation, PYMNTS reported July 7.

Samuel Kerr, head of equity capital markets at Mergermarket, told PYMNTS this is a common trend following a period of maturity in which larger companies would seek out smaller players to access their technologies instead of developing their own.

“You’re going to start to have the big winners start to acquire other technologies rather than doing it in-house,” Kerr said. “That’s the natural progression.”

According to data from Mergermarket shared with PYMNTS, the value of global M&A deals involving AI firms jumped by 288% to $49.9 billion in 2024 versus the previous year. The number of deals rose 53%, to 454. The number of deals has risen by 130% since 2019, while the deal value has skyrocketed by 730%.

Meanwhile, VC firms are seeing more money going into AI startups than coming out of exits. During the first half of 2025, AI startups in the United States raised $104.3 billion, while VC-backed exits came to $36 billion.

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