TLDR: A Q3 2025 Global Report by Ropes & Gray LLP highlights a significant shift in artificial intelligence adoption, with AI moving from experimental phases to becoming a core enterprise strategy. The report indicates that 65% of companies are now regularly utilizing generative AI, a substantial increase from 33% in 2023. This surge in adoption is fueling massive investments in AI infrastructure and driving unprecedented deal activity across venture capital, private equity, and strategic mergers and acquisitions.
The third quarter of 2025 marks a pivotal moment in the evolution of artificial intelligence, as detailed in the latest Global Report from Ropes & Gray LLP. The report underscores a fundamental transition where AI is no longer a nascent technology but a central pillar of enterprise strategy. A striking 65% of companies are now regularly deploying generative AI (GenAI), a figure that has doubled from 33% in 2023, signaling a clear shift from pilot programs to widespread structural integration.
Beyond GenAI, the report identifies agentic AI as a significant growth frontier. Cowen projects enterprise spending on agentic AI to skyrocket from less than $1 billion in 2024 to an estimated $51.5 billion by 2028, demonstrating a remarkable Compound Annual Growth Rate (CAGR) of approximately 150%. This growth is attributed to reasoning models and autonomous workflows that enable enterprises to extract greater value from AI integration.
The economic impact of AI is profound, with infrastructure investments serving as a primary driver. According to Harvard Economist Jason Furman, 92% of U.S. GDP growth in the first half of 2025 was linked to investments in AI data centers and supporting technologies. This massive buildout is being fueled by Big Tech, hyperscalers, leading AI platforms, and private capital investors, often through strategic partnerships and public-private consortiums aimed at accelerating innovation and achieving societal benefits.
Investment activity in the AI sector has reached unprecedented levels. The report reveals that 51% of global venture capital (VC) deal value is now concentrated in AI, propelling startups past the $1 billion valuation mark at a pace exceeding the dot-com era. Strategic Merger & Acquisition (M&A) value involving AI targets has seen a staggering 294% year-over-year (YoY) increase through Q3 2025, with transaction volume up 51% YoY. Private equity (PE) deal volume involving AI targets also surged by 65% YoY, despite PE firms primarily focusing on AI infrastructure investments.
Private equity’s approach often involves enhancing existing portfolio companies through targeted add-on acquisitions. The report notes, ‘Rather than taking on the uncertainty of new AI platform investments, firms are enhancing the capabilities of existing portfolio companies through targeted add-on acquisitions. In Q3, 78% of PE deals with AI targets were add-ons, reflecting GPs’ preferences for creating value and managing risk in the AI space through buy-and-build strategies.’ This strategic focus has led to a record 265 PE deals involving non-infrastructure AI targets through Q3 2025, compared to 161 in Q3 2024.
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Amid this rapid expansion, concerns about security and product indecision remain top barriers for investment managers, as highlighted by a collaborative survey between Corporate Counsel and Ropes & Gray. Nearly 75% of in-house counsel surveyed are already utilizing AI in their organizations, with the remainder exploring or piloting initiatives. Howard Glazer, partner and head of Ropes & Gray’s private equity transactions practice, stated, ‘AI is fundamentally transforming the business landscape, creating new opportunities and challenges for investment managers, private equity firms, asset managers and public companies.’ Sergey Polak, director of technology innovation at Ropes & Gray, emphasized their advisory role: ‘We advise our clients in considering both the technical risks and the legal risks. On the technical side, we do very detailed due diligence on these tools.’ The report also cautions that ‘Amid the intensifying “fear-of-missing-out,” discipline and intentionality remain core to many acquirers’ M&A strategies, particularly in the context of organizations reporting high AI adoption rates but few transformational results.’
