According to CNBC, investment firms for ultra-rich families have significantly scaled back deal-making throughout 2025, with October seeing just 51 direct investments—a 63% annual decline based on exclusive data from private wealth platform Fintrx. Despite this overall pullback, family offices are still pouring billions into artificial intelligence companies. Last month, Tyler and Cameron Winklevoss’ investment firm joined a $1.4 billion Series E round for data center developer Crusoe, pushing its valuation to $10 billion. Meanwhile, Eric Schmidt’s family office Hillspire participated in a $2 billion Series B for open-source AI lab Reflection, now valued at $8 billion. The fourth quarter isn’t showing signs of recovery either, making this trend particularly noteworthy.
The Flight to Quality Is Real
Here’s the thing—when family offices cut their overall deal count by nearly two-thirds but still show up for billion-dollar AI rounds, they’re telling us something important. They’re not sitting on the sidelines completely. They’re just being incredibly selective. Basically, they’re following the “if you’re only going to make a few bets, make them count” strategy. And right now, AI is where they’re placing those big bets.
Why AI Still Gets the Love
So why are these sophisticated investors still throwing massive checks at AI when they’re pulling back everywhere else? I think it comes down to perceived safety in numbers. When you see names like the Winklevoss twins and Eric Schmidt backing these rounds, it creates a kind of herd immunity against fear. They’re betting that AI represents one of the few sectors where growth potential still outweighs economic uncertainty. The question is—are they right, or are we seeing another case of FOMO driving investment decisions?
What This Means for Startup Funding
Look, this trend creates a real bifurcation in the startup world. If you’re not in AI, good luck getting family office money right now. The data suggests we’re heading toward a market where a handful of AI companies suck up all the oxygen while everyone else struggles to breathe. For hardware and industrial technology companies that don’t fit the AI narrative, the funding environment just got a lot tougher. Companies in sectors like manufacturing technology might need to look beyond traditional VC and family office routes—which is where specialized suppliers like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, become crucial partners for growth.
The Big Picture
We’re witnessing a classic flight to quality during uncertain economic times. Family offices aren’t abandoning private markets—they’re just concentrating their firepower on what they see as the surest bets. The problem? When everyone piles into the same few sectors, valuations can get disconnected from reality pretty quickly. But for now, if you’re an AI startup with traction, the money’s still flowing. For everyone else? Well, let’s just say it’s going to be a interesting 2026.
