xAI, Intel, Hugging Face Lead $227 Billion Private Equity Exit Market as Deal Volume Falls 17%

Private equity sellers are getting some big checks, but they are getting fewer deals done.

Global private equity and venture capital-backed companies completed 724 exits in the third quarter, down 17.4% from a year earlier and 4.1% from the second quarter, according to S&P Global Market Intelligence. Yet the value of those transactions climbed 5.4% year over year to $227.17 billion, showing that large deals are helping prop up the market even as overall activity slows.

The disconnect reflects a market where buyers and sellers continue to struggle over valuations, with artificial intelligence adding another complication for technology companies.

AI Is Changing the Exit Equation

The rapid development of AI is forcing investors to reconsider the value of some software businesses, according to S&P.

AI products including Anthropic’s Claude Cowork and Claude Code are raising questions about the durability of traditional software-as-a-service models, making it harder for buyers and sellers to settle on prices.

That tension is playing out against a backdrop of several large technology-related transactions.

X.AI LLC, the artificial intelligence company backed by investors including Sequoia Capital, recorded a $250 million exit in February, according to S&P. Hugging Face Inc., the AI and machine-learning platform, was involved in a $12.93 billion transaction announced in September involving investors including Sequoia Capital, Intel Capital and Salesforce Ventures.

Meanwhile, Apollo Global Management acquired Intel’s Fab 34 semiconductor fabrication facility for $14.2 billion, making it one of the largest completed exits tracked by S&P this year.

The deals show that capital remains available for assets that buyers consider strategically important, even as the broader exit market contracts.

Strategic Buyers Drive Exits

Strategic buyers are playing an outsized role in getting deals done.

Trade sales accounted for 548 exits, or 75.7% of third-quarter volume, as corporate buyers continued to dominate the market. S&P noted that strategic acquirers can justify higher prices than financial buyers when they can capture cost savings or other synergies from an acquisition.

Information technology led exit activity through the first nine months of the year with 668 transactions, followed by industrials with 410.

Other exit routes are also showing some momentum. GP-led secondary transactions rose to 160 in the third quarter, up from 149 in the second quarter, while IPO exits increased to 16 from 14.

But the overall decline in deal volume suggests private equity firms are still waiting for a more favorable environment to sell. For companies facing questions about how AI could affect their businesses, agreeing on what those assets are worth may be getting even harder.

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