HSBC Releases 2026 Innovation Horizons Report

(NEW YORK) – December 5, 2025 – HSBC Innovation Banking today released its 2026 Innovation Horizons Report, a data-driven analysis of how AI, venture investment, and capital flows are reshaping the innovation economy. This year’s findings show a market characterized by rapid scaling in AI, concentrated mega-round financing, and intensifying global competition around digital infrastructure.

The annual report reflects HSBC’s commitment to providing founders, investors, and corporate leaders with clear, actionable insights into the forces shaping company formations, capital allocation, and ecosystem development in key innovation hubs around the world.

Key Findings:

AI leaders and Tech Companies Continue to Dominate

Tech companies poised to capitalize on the promise of AI are driving the top end of the market, with eight topping $1 trillion in value. Approximately 60% of S&P 500 gains this year have been led by the top 10 names. This same AI fervor is driving ever-higher valuations in private markets. Top venture backed companies would now be among the largest companies in the U.S. if listed on public markets.

Capital Concentrates into the Mega Rounds

Venture investment in US startups has captured headlines, topping $75B every quarter. However, total deal activity has slowed to levels last seen in the mid-2010s. The concentration of venture capital seen in AI mega-rounds is changing the math for earlier-stage rounds as well, with investors betting heavily on the momentum of earlier-stage AI companies, wagering they can more efficiently put capital to work to rapidly capture market share than pre-AI generations. Venture valuations are also soaring beyond the heights of 2021-2022, with more than half of Series B companies valued firmly above $100M this year.

Where the AI Hotspots Are Today

In the Bay Area and New York, a depth of AI talent and capital have powered early-stage venture activity back to levels reached during mid-pandemic ZIRP exuberance. While the focus on AI is deserved, nearly three-quarters of startups raising capital in the middle of the country are working outside the AI exuberance, focusing on geographically relevant segments.

Exits: High Risk, Huge Rewards

Tech firms have set record highs on the back of strong earnings growth and high expectations for AI. Valuations are priced to perfection with little margin for error, with long-funded companies now finding opportunities to list with some liquidity relief from the re-opening of the IPO window in early 2025.

Geopolitical Implications and the Compute Race

While global energy capacity rapidly expands to fuel the AI technological revolution and the U.S. is proudly committing trillions to capacity, China is closing the gap as the rival economic superpower. Still, AI-driven energy demand is accelerating fastest in North America, where investment concentration mirrors infrastructure dominance: North America represents more than two-thirds of AI mega-rounds in 2025, reinforcing a strong lead in both compute build-out and next-generation scaleups.

“AI-driven innovation continues to reshape capital markets and business strategy at an unprecedented pace,” said David Sabow, Global Head of Innovation Banking. “This year’s Horizons Report shows that AI is reshaping opportunity everywhere, and those who understand its impact earliest will be best positioned to lead.”

Today, HSBC Innovation Banking supports venture-backed companies and their investors by providing global commercial banking, venture debt, investment and private banking, and asset management services. With over 900 bankers globally across 10 markets in North America, Continental Europe, Asia-Pacific, and the United Kingdom, roughly 70% of the global venture flows are seen by HSBC. In the first half of this year alone, HSBC’s Innovation Banking business grew its active clients by almost 60%. Deposits rose by 50%, and loan commitments increased by nearly 25%, underscoring the businesses’ continued momentum and unique position as the largest dedicated platform supporting innovation globally.

Download the Full Report

Available now at: https://www.hsbcinnovationbanking.com/en/resources/2026-horizons-report

Media Contact

Conor Gronbach, Communications Manager CIB
New York
+1 (919) 609-9423
Conor.gronbach@us.hsbc.com