Road to Next
Physical world in focus: Expansion-stage dealmaking in foundational industries
In the Q2 edition of the Road to Next series—a quarterly report exploring emerging investment trends in the private financial markets—we examine private capital shifting into physical infrastructure and foundational industries to support the expansion driven by the AI revolution.
What to know now
AI’s physical footprint
As AI scales, capital flows into the chip, hardware, and manufacturing systems that make digital transformation physically possible.
Energy and commercial products draw the most capital
Alternative energy, infrastructure, and aerospace and defense drive outsized investment in these sectors.
Semiconductor values surge
Chip deal value climbed despite a lower transaction count, reflecting the capital intensity required for specialized hardware.
A broadening base of entrants
Rising first-time expansion-stage transactions in 2025 point to a broader pool of new entrants shaping future investment and exit activity.
Opens in new window
We saw a similar pattern emerge with social media platforms—there was always a question of how anyone would ever monetize the investment. We know how that played out. The monetization story here isn’t fully in focus yet, but as it becomes clearer, that’s when you’ll see winners emerge.
Justin Yahr, Audit & Assurance Partner and National Emerging Company Growth Leader, Deloitte & Touche LLP
Q2 2026: Explore the trends transforming the physical world
Discover the shifts shaping foundational industries: where capital is scaling, the ways financing is evolving and where activity is emerging
Physical-world industries by the numbers
See our latest Road to Next report for the data behind rising expansion-stage deal value in four industries
Justin Yahr
