Bildnachweis: PwC.

participants in the global corporate venturing sector and participation in the Global Corporate Venturing & Innovation Summit, which attracts over 800 venturing leaders. Once again, the team returned with valuable insights into current dynamics and trends.

The Silicon Valley innovation ecosystem is a vibrant and multifaceted network, energized by a unique convergence of exceptional talent, readily available capital, leading research institutions, and a deeply embedded culture that embraces risk and experimentation. It flourishes through the continuous interaction among start-ups, established technology giants, over 2,300 (corporate) venture capital firms as well as distinguished universities such as Stanford and Berkeley. This dense interconnectedness facilitates the swift creation, funding, and scaling of groundbreaking concepts. The high concentration of CVC activity in Silicon Valley fosters a fiercely competitive yet exceptionally fertile environment for innovation: with Apple, Nvidia, Tesla, Alphabet and Meta, five of the ten most valuable global companies by the end of 2024 were founded in the area and funded through venture capital.

The transformative power of AI remains

The global transformative rise of artificial intelligence is profoundly reshaping this ecosystem. Global venture capital investment in AI companies exceeded USD 100 billion in 2024, an 80% increase from the previous year, representing nearly a third of all global venture funding (Scale Capital, Generative AI Landscape Q4 2024). Silicon Valley is at the forefront of AI research and development, with both emerging startups and established technology powerhouses aggressively advancing the frontiers of machine learning, deep learning, natural language processing, computer vision, and robotics. The potential applications of AI are extensive, affecting nearly every sector, from healthcare and finance to transportation and manufacturing. For CVCs, the strategic imperative lies in identifying and investing in promising AI start-ups to ensure their parent companies not only maintain a competitive stance but also capitalize on this revolutionary technology. A nuanced understanding of the various AI subfields, the associated ethical considerations, and the potential for widespread disruption across diverse industries is paramount for making informed investment decisions. Notably, in 2024, AI start-ups captured a record 37% of CVC-backed funding and 21% of deals, highlighting the intense focus on this sector (CB
Insights Research, State of CVC 2024 Report).

Emerging market: Defence technology

At the same time, the increasing convergence of technology and defence is emerging as another significant trend in the light of growing geopolitical uncertainty. The rise of deeptech with implications for national security, encompassing domains such as advanced robotics, autonomous systems, cybersecurity, quantum computing, and advanced materials, is catalysing a new wave of innovation within Silicon Valley. Traditionally distinct, the commercial and defence sectors are now exhibiting increasing interconnectedness, with numerous start-ups developing dual-use technologies applicable in both arenas. CVCs are progressively exploring investment opportunities in this space, recognizing the potential for substantial growth and the critical strategic importance of these technologies. Navigating the intricate landscape of government regulations, stringent security protocols, and the unique demands of the defence sector necessitates specialized expertise and a rigorous due diligence framework. Globally, venture capital funding in the defence, security, and resilience (DSR) sector reached a record USD 5.2 billion in 2024, marking a 30% increase over the past two years (NATO Innovation Fund and Dealroom Report, February 2025). Furthermore, the war in Ukraine alerted Europe to new realities, transforming defence technology from a largely overlooked sector by most European venture capitalists into a leading investment area within deeptech: according to Dealroom, defence and resilience technology reached a record peak, accounting for 10% of all venture capital funding in Europe — a two-and-a-half times increase over the past two years.

Contrasting investment mentality in the US and Europe

The investment philosophy prevalent in the United States, particularly within the Silicon Valley corporate venture capital community, presents a notable contrast to the innovation mix often observed amongst corporates in Europe. US investors generally demonstrate a greater propensity for risk and place a stronger emphasis on the potential for high growth, even when associated with a higher likelihood of failure. The ‘go big or go home’ mentality is more widespread, even among corporate investors frequently seeking out companies with the potential for exponential returns. ‘We’re channelling a portion of our cash flow into pioneering ventures which translated into over USD 300 million in 2024 investments. Our commitment is not just about funding; it’s about fuelling innovation, capturing opportunities, and leading the charge in transforming potential into progress across diverse industries’, says Sagi Paz, Head of AMD Ventures, who welcomed PwC’s delegation in their offices in Santa Clara. While the European investment culture is evolving, it has historically been more characterized by focusing on R&D as well as internal innovation rather than using open innovation or direct investments into external innovation. DAX 30 companies spend 96% of their innovation budget on internal resources, while only 4% is spent on external innovation such as mergers and acquisitions, corporate venture capital or acceleration projects. This difference in approach has been known for years and can significantly influence the types of companies that secure funding, the trajectory of their growth, and the overall dynamism of the innovation ecosystem. For European CVCs and executives seeking to effectively engage with the Silicon Valley landscape, a thorough understanding of these contrasting investment philosophies is crucial.

Shifting global landscapes creating uncertainty and risks

However, the current global landscape is fraught with significant challenges and potential risks. The ongoing tensions surrounding international trade, marked by the imposition of tariffs and shifting international relations, are generating considerable uncertainty and potentially impacting the flow of capital and talent. For Silicon Valley, a region heavily reliant on global talent and international markets, these geopolitical headwinds can pose substantial risks. Disruptions to supply chains, restricted access to international markets, and a general dampening of the investment climate due to heightened uncertainty are all potential consequences. CVCs and corporations must accurately assess these risks and gain insights into how they are being addressed within the Silicon Valley ecosystem. Are start-ups adapting their supply chain strategies? Are investors incorporating geopolitical risks into their valuation models? How are international collaborations being affected? These are critical questions that require careful consideration in any organization seeking to engage with or invest in this region.

Outlook

In conclusion, Silicon Valley’s CVC and innovation ecosystem remains a vital network for global technological advancement. As US-based companies face uncertainties, Europe may now have the chance to position itself as a stable and attractive hub for investments and especially highly skilled talent. However, a significant amount of capital invested in late-stage funding rounds in the EU and Great Britain currently comes from the United States (40%). In Germany, almost half of the late-stage investments currently stem from the US. Should this influx decrease, Europe and especially Germany might face capital shortages in these critical stages. Sven Wiszniewski, responsible for Venture and Growth Capital investments at Geschwister Oetker Beteiligungen KG, joined the delegation trip and summarizes: ‘Germany should take advantage of the momentum and start to foster the right conditions for start-ups and investors by reducing bureaucracy and digitizing administrative processes. Additionally, it would be crucial to strengthen European capital markets in the long term to bolster both financing opportunities in later stages and exit strategies. This could lead to a market environment that presents attractive investment opportunities in the early-stage segment.’

About the authors:

Florian Nöll is Partner at PwC Germany and head of PwC’s Global Center of Excellence
for Corporate Venturing. In addition, he is EMEA Start-ups, Scale-ups & Venturing Leader
with long-term experience in connecting start-ups, corporates, and investors.

Serge Reh is Senior Manager at PwC Germany and leads the Corporate Venture Capital unit
in PwC’s innovation ecosystem. In addition, he is part of PwC’s Global Center of Excellence for Corporate Venturing.