Private artificial intelligence (AI) companies are now trading at valuation multiples that public software investors have not achieved.

Data from Forge Global shows that private-market enthusiasm around AI continues to dramatically outpace valuation discipline in public equities. 

Private AI Valuations Soar Beyond Public Peers

Forge's Private Magnificent 7, which includes OpenAI, Anthropic, Databricks, xAI, Stripe, SpaceX and Anduril, has ballooned from a combined valuation of $264 billion at the beginning of 2023 to roughly $1.2 trillion.

Those seven companies alone surged 96% over the past year, compared with 34% growth for the public Magnificent 7 (Meta, Alphabet, Tesla, Amazon, Apple, Microsoft, Nvidia) tech stocks. This gap illustrates how aggressively private investors are pricing AI dominance relative to public-market peers, where investors are more focused on profitability, margins and cash flow efficiency.

The Striking Valuation Divide Explained

The valuation gap is especially striking when measured against revenue. Databricks, for example, has traded privately near a $100 billion valuation while reportedly generating around a $4.8 billion revenue run rate — implying a revenue multiple around 20x to 28x depending on the measurement period. 

Meanwhile, many mature public cloud and SaaS companies trade closer to 5x to 12x forward revenue, with only a handful of elite AI-linked public names sustaining valuations above that range. Even after the AI rally, broader public SaaS multiples remain far below private AI levels. One analysis of 145 public SaaS companies showed median public software revenue multiples below 5x, as of May 12, 2026.

Public investors spent the last several years repricing software companies after higher interest rates ended the zero-rate growth era. Companies that once traded at 30x or 40x revenue saw dramatic multiple compression as Wall Street demanded earnings discipline instead of growth at any cost.

Private AI companies, however, have largely escaped that reset.

"The top 10 private companies were valued at $399 billion in December 2022; as of February 2026, those same companies represent approximately $2.7 trillion in aggregate value — a 569% increase in just three years. By comparison, the Nasdaq-100 ETF (QQQ) appreciated 132% over the same timeframe, highlighting the magnitude and concentration of growth among the largest private companies," Forge wrote in a report.

How Are Investors Pricing The AI Future?

In many ways, private investors are behaving as though the AI race has already narrowed to a handful of eventual winners — and they're willing to pay almost any price to secure exposure now rather than risk missing the next generation of tech giants. That's a very different mindset from what's happening in public markets.

Public software investors have become far more selective over the last two years. Even strong cloud and SaaS companies are getting punished for slowing growth, weak margins, or heavy AI spending without clear returns. Revenue growth alone is no longer enough to support premium valuations in public equities.

The IPO market could determine whether those assumptions hold. Once companies such as OpenAI or Databricks are subject to quarterly public-market scrutiny, investors may begin applying the same valuation standards that already govern public SaaS companies, where growth alone is no longer enough to justify sky-high multiples.

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