Major AI capital requirements extend far beyond ‘Big Four’

The stupendous amounts of capital needed to build AI infrastructure in the United States — more than $1 trillion last year alone, by one informed estimate — almost certainly will continue to be the single greatest focus of investors through 2026.

But the astounding capex numbers tossed out by the big four of AI — Meta, Alphabet, Amazon and Microsoft — obscure the needs of hundreds of smaller companies across the economy. They’ll need growth financing to underwrite new and enhanced products that meet the competitive demands of a market shaped by AI.

The AI-related capital needs of those smaller companies each will be different, one from the next. Lenders and investors will be challenged to ensure adequate funding through vehicles that allow these enterprises to grow and flourish in this new era.

Improving the AI experience

In some cases, these smaller companies will be looking for the support of capital markets to finance development of products directly linked to consumers’ experience with AI.

In St. Paul, Minn., for instance, Solsten Inc. is investing heavily to extend the psychological intelligence tools it developed earlier for use in advertising campaigns by major brands. The new application: Creation of emotionally intelligent AI interfaces.

Joe Schaeppi, the one-time psychotherapist who co-founded Solsten seven years ago, says the work takes on additional urgency as 69 percent of people want AI interactions that feel less robotic, and more than 80 percent are more likely to engage when the content is personally relevant.

To underwrite that urgent project, Solsten has turned to established providers of growth financing as well as nontraditional sources. Not long ago, it launched a crowdfunding campaign on StartEngine Marketplace, an equity offering that Solsten hopes will raise as much as $1.235 million to support its AI work.

Wide spectrum of investment needs

Healthcare providers, meanwhile, face growing capital needs as AI tools dramatically change the ways that providers diagnose and treat patients.

Little Otter Health, a trailblazer in digital whole-family mental health care launched in 2020, now is moving quickly to enhance the AI tools that protect its market-leading position. To finance development of stronger AI functionality, the company headquartered at Durham, N.C., sought support of high-profile equity investors as well as growth-debt financing during the past year.

The need for fresh capital in the transition to a world of AI is strikingly evident, too, at Relianceai, a leader in real estate technology solutions based at Scottsdale, Ariz. For nearly a quarter of a century, the company previously known as Reliance Network has provided Web sites, lead-generation tools and other technology to real estate agents.

Now, as it transforms into a provider of intelligent and deeply integrated technology, the rebranded company is launching a hyper-realistic synthentic human — far more than a simple chatbot — dubbed “Areia” to connect with consumers.

A privately arranged multi-million-dollar growth financing package accelerated that development, says Sean McRea, the CEO of Relianceai.

These organizations are only a tiny sample of the hundreds that are working with investors and lenders to nail down capital for AI projects as the new era unfolds.

Growth companies need flexibility

In many instances, the companies that require additional capital to adopt AI functionality already have been squeezing their capital structure hard. They’re often pioneering leaders in their sectors, the sort of enterprises whose rapid growth places stress on working capital. Their very success may leave limited financial resources for AI initiatives.

That, in turn, means that financial flexibility often will be an important element in the transactions that provide growth capital to these organizations. They need flexibility to move quickly, take advantage of opportunities and ride out waves in their markets.

The large majority of the firms that will seek capital for AI initiatives in coming months are privately held. Some will be open to venture funding, and they’ll be willing to accept dilution of existing shareholders’ interests or potential loss of management control for the possibility of a big AI-related payout. But for others, the potential loss of control in an equity deal will be an exceedingly difficult price to pay. Their hopes for flexibility and their reluctance to pursue equity deals will open opportunities for hybrid financing — mixtures of debt and equity — and custom-designed transactions.

In fact, many of the most interesting financial developments in AI in 2026 are likely to arise in meeting rooms far distant from the glass towers of the giants that are battling for dominance. The sheer number of smaller companies that will need capital for AI initiatives, the urgency they feel to prepare themselves for a new world, and rich variety of their needs will combine to make 2026 one of the most fascinating years we have experienced.