Commercial real estate's largest asset managers are shouldering the costs and technical challenges of building proprietary artificial intelligence tools, a development that signals the industry's deepening commitment to technology rather than a retreat from independent proptech vendors. Two high-profile joint ventures announced in May 2026 drew attention to the trend, yet venture capital investment data suggest the shift is expanding the proptech ecosystem rather than displacing it.
On May 4, Anthropic announced a $1.5 billion joint venture with financial leaders including Blackstone and Goldman Sachs, originally called the Claude Partner Network and renamed Ode, which will customize AI solutions and provide customer support to select clients. In a news release, the partner group said midsize firms lack the in-house resources to build and run frontier deployments. General Atlantic, Leonard Green, Apollo Global Management, GIC and Sequoia Capital joined as financial backers of the Claude network.
That same day, OpenAI announced the $10 billion OpenAI Deployment Company, a joint venture with TPG, Brookfield, Bain Capital, Advent, SoftBank and Dragoneer focused squarely on real estate portfolio companies. Industry experts anticipate that in-house proptech development will handle core workflows independent proptech companies already tackle, such as portfolio management and underwriting.
Yet venture capital investment in proptech reached $16.7 billion in 2025, a 68 percent increase over the previous year, according to the Center for Real Estate Technology and Innovation. AI-native companies captured $4.5 billion of that total, growing their share of proptech venture capital dollars 42 percent year-over-year, nearly double their software as a service counterparts, which face a real threat from AI innovators. The data suggest investors are rotating toward AI-native newcomers and away from legacy software models rather than fleeing the category altogether.
Josh Panknin, director of real estate AI research and innovation at Columbia's Fu Foundation School of Engineering and Applied Science, has surveyed the sprawling $50 billion to $60 billion proptech startup landscape and predicts the bigger players will find enterprise-scale AI development trickier than it looks. Real estate companies are not technology development companies, and have not been as successful as them in the past, Panknin said, which leaves room for a robust startup space in a decentralized industry.
The fragmented nature of real estate data presents a structural obstacle to in-house development. It is very fragmented, the data that comes in on real estate comes from very different sources, different formats, different market definitions, Panknin said, which keeps proptech applications from scaling across markets and problems. That fragmentation also means the proptech startup market has not produced many billion-dollar unicorns, he noted, adding that the most upside is not in point solutions and automating workflows, but in focusing on infrastructure and foundational capabilities.
The five largest independent proptech companies, CoStar Group, Yardi Systems, RealPage, Procore Technologies and AppFolio, focus on market data, property management and construction management, specific slices of the complex, multifaceted commercial real estate industry. Collectively, they reported about $9.2 billion in fiscal 2025 revenue, and will likely anchor proptech for some time. Still, the barriers that once protected proptech incumbents, technical complexity, cost and talent, are eroding.
Ashkan Zandieh, managing director of CRETI Ventures at the Center for Real Estate Technology and Innovation, calls the change significant but subtle. Large owners building AI capabilities will not shrink the proptech sector, Zandieh said, noting that internal enterprise software teams in banking, retail and health care ultimately fostered larger vendor ecosystems. What we are seeing in real estate is a sign of market maturity, more than a threat to proptech, he said.
Zandieh views the headline-grabbing deals as overhyped, at the very least. Blackstone's push into AI aims to improve portfolio intelligence, since the $1.35 trillion alternative asset manager generates revenue that way, and harnessing internal data will create efficiencies. Brookfield, likewise, is seeking enterprise-wide AI solutions to cover its vast global portfolio. Neither poses a significant threat to proptech, Zandieh said, because they are not in the business of selling software solutions.
Most venture capital firms still focus on startups that address discrete corners of the diffuse real estate industry, including construction, transaction management, design and the work of running large commercial properties. Travis Connors, co-founder and general partner at building ventures, a Boston venture capital firm whose portfolio includes Built Robotics, Dyn and Clearstory, said the Claude partnership and Brookfield's tech ramp-up create a more noisy environment for startups.