Venture Geopolitics Issue 25

09 December 2025

In a de-globalising economy, countries increasingly need to own the full AI stack: power, chips and R&D. China appears to be leading the way here. It has kept pace on research (DeepSeek), surged ahead on power and is now rapidly closing the gap on advanced chips.

When the US eased export controls on Nvidia’s H200s this week, China responded by signalling the chips were not meaningfully superior to domestic alternatives and by limiting access regardless. At the same time, China passed $1 trillion in exports despite US tariffs, while GPU maker Moore Threads listed in Beijing and traded up >400%, a clear signal of domestic backing.

The power arithmetic is equally stark: forecasts to 2030 suggest China will need AI-related electricity equal to just 1–5% of the power it added over the past five years, versus 50–70% for the US.

And Europe? The intent is real, but regulation is heavy and timelines keep slipping. This week the EU again deferred formal calls for AI gigafactories.

Hopefully Apple’s recent rebound hints that a slower, more considered approach to AI could still compound into a competitive edge!

IPOs

• Moore Threads (Chinese AI chipmaker) surged >400% in $1.1B debut signalling domestic support for alternatives to Nvidia. China on track to produce more AI chips than it consumes by 2026 (neutralising chokehold of US export controls) (here)

• Anthropic hired Wilson Sonsini as it eyes 2026 listing (here)

Mag 7

• Amazon unveiled faster, more efficient AI training chip & server system as it pushes to cut customer costs while previewing a next-gen chip that will work with Nvidia hardware (here)

• Exceptional turnover at Apple - 4 C-suite execs reporting directly to Tim Cook stepping down in past week (SVP Hardware Johny Srouji “considering leaving”) (here)

• But Apple’s slow AI pace becomes seen as a strength as the market grows weary of spending (here)

• Meta to cut resources for building metaverse - cuts as high as 30% as early as January (here)

• Meta hired longtime Apple design chief Alan Dye to revamp consumer devices with AI, a high-profile poach that signals Meta’s push into hardware while deepening Apple’s leadership churn (here)

• Microsoft in talks to design future custom chips with Broadcom (here)

M&A

• IBM in talks to acquire Confluent (data streaming platform) in $11B deal (here)

• SoftBank in talks to acquire DigitalBridge, one of the largest publicly-traded investors in data centre companies. Would give SoftBank stakes in developers like Vantage Data Centers, which is building Stargate sites for Oracle to provide computing power to OpenAI (here)

Big Dogs

• OpenAI planning to release next AI model earlier than planned amid pressure from Google / the declaration of “code red”. GPT-5.2 likely to be unveiled this week (here)

• OpenAI set to build massive $4.6B “GPU Supercluster” in Australia - a 550MW Hyperscale Campus by 2027 (here)

• Kalshi (event-based betting platform) raised $1B at $11B (here)

• Eon (cloud infrastructure for transforming dormant corporate assets into AI-ready data) raised $300M at $4B (here)

Venture Capital

• Wilson Sonsini’s Entrepreneurs Report (Q3 2025 Data) (here)

  • US: Valuations & round sizes increased QoQ across stages

    • Ser C+ fundraise amounts climbed to median of $71M, reaching a pre-money of $550M

    • Ser B median pre-money experienced strongest quarter in over a year at $168M, with median raises rebounding to $19M

    • Ser A median pre-money reached $58M, with median raises essentially unchanged ($14M)

    • Median Seed amounts rose to $5M, with a pre-money of $20M

  • UK: Q3 2025 saw a drop-off in both the number & value of deals compared with previous quarter (£4.45B, 35% down on Q2)

    • Established-stage companies saw greater success in the average company valuation, rallying to £71M

    • Downturn in Seed-stage mean valuations, dropping 25% to £3.7M - the lowest figure for >4 years

• New research finds an AI system can screen & organise startup opportunities far more efficiently than human VC analysts without losing quality. VC LLMs cut deal screening from 2hrs to ~13 secs and produce startup groupings of similar quality (silhouette scores 0.35 vs. 0.37 for humans) (here)

• U.S. tech mergers rebounded to highest levels since 2021, reaching $543B in total value, driven by big bets on AI & more tie-ups under a deal-friendly US administration (here)

Venture Geopolitics

• Trump said (in a Truth Social post) the US would allow Nvidia “to ship its H200 products to approved customers in China . . . under conditions that allow for continued strong National Security”. Nvidia’s Jensen Huang and other proponents (including David Sacks) say this will help the US by making China reliant on American technology (here)

• The NYT framed David Sacks - a VC now serving as the White House’s unpaid AI & crypto ‘czar’ - as “benefiting himself & his friends,” citing 708 tech investments, including 449 tied to AI & policies. When public power amplifies private capital at this scale, the conflict of interest seems stark. But the critique conflates sector-wide industrial policy with self-dealing: Sacks divested ~$200M, works without pay & would likely be richer had he stayed out of government, yet his market-level fluency is what the state needs to govern emerging technology. The episode is a signal that venture power & national strategy are colliding & to push forward AI/crypto/tech adoption there are perhaps few alternatives to such trade-offs (here)

• SoftBank’s Masayoshi Son is negotiating a sweeping plan to build Trump-branded AI industrial parks on federal land using Japanese trade-deal money (here)

• Trump accelerating shift in power from investors/shareholders to the boardroom mirroring his own moves in favour of executive power. Tilt away from shareholders started in 2021 after Exxon lost 3 board seats in a boardroom battle with an environmentally conscious hedge fund. Proposed exec orders would curb voting influence of passive giants (BlackRock, Vanguard & State Street) which often own 20–30% of public companies while also taking aim at proxy advisers (ISS & Glass Lewis). Carl Icahn warns muzzling independent research would “reward underperforming CEOs & stifle oversight” (here)

• China’s trade surplus has surpassed $1T, a level no country has ever reached, despite US tariffs. Shipments to SE Asia have grown rapidly and trans-shipments (i.e. shipments from SE Asia to the US) haven’t been clamped down on. China helped by dominance in EVs, batteries & robotics (here)

• European Commission has advanced its AI gigafactories plan by agreeing a funding framework with the EIB and EIF under the €20B InvestAI initiative. But formal calls for interest pushed back to early 2026. Up to five EU-led gigafactories are planned, each requiring >100,000 advanced chips, with strong private-sector interest already >€230B (here)

• EU Commission plans a Quality Jobs Act for next year that could regulate algorithmic management (AI bosses) and remote work. Unlike the current AI Act, which focuses on product safety, the proposal may set rules on how employers ethically use AI to manage workers (here)

• In the UK, BT is repositioning itself as a backbone of digital sovereignty with a new “sovereign cloud” platform for its public-sector & business customers to store & process data in country. A response to increasing demand for higher levels of resilience. When only ~[4]% of data is held in UK sovereign data centres this can only be good news (here)

• EU fined X $140M on Friday for violating the Digital Services Act. The penalty prompted a harsh reaction from US VP JD Vance as well as inevitable public lament from Elon Musk, who denounced the EU as a “tyrannical, unelected bureaucracy oppressing the people” (here)

• Australia will introduce one of the world’s toughest social media policies, banning platforms for children under 16. Malaysia, Denmark, & Norway are set to follow suit, with the EU also passing a resolution to adopt similar restrictions. Proponents believe restricting access will reduce mental health risks, but opponents worry the legislation is ill-conceived & will push children into murkier corners of the web (here)

Strategic Sectors

AI

• IBM CEO walked through napkin math on data centres and said that there’s “no way” to turn a profit at current costs. “If I look at the total commits in the world in this space, in chasing AGI, it seems to be like 100GW with these announcements”. At $80B each for 100GW, that sets the price tag for computing commitments at ~$8T. “It’s my view that there’s no way you’re going to get a return on that, because $8T of capex means you need roughly $800B of profit just to pay for the interest” (here)

• A team of researchers has found that chatting with a politically biased AI model was more effective than campaign advertisements or TV at nudging both Democrats and Republicans to support candidates of the opposing party. The chatbots swayed opinions by citing facts & evidence, but they were not always accurate - in fact, the most persuasive models said the most untrue things (here)

• 93% of companies underestimate their competitors and notably misjudge how quickly rivals are adopting AI & robotics (here)

• Goldman Sachs AI Adoption Tracker

  • AI-related investment growth strong, particularly for semiconductor firms, where analysts expect revenue growth of 47% from current levels by end of 2026

  • AI adoption by firms now at 17.4% among US establishments, with adoption highest among large firms (40% of 250+ employees expect to be using AI in 6mo)

  • Overall impact on labour market limited, although AI employment headwinds visible in specific occupations: marketing, graphic design, & tech (where share of overall employment fallen below long-run trend)

  • Academic studies imply 27% average uplift to productivity, while company anecdotes imply slightly larger efficiency gains of around 33%

• Legendary mathematician Ken Ono’s move to join Axiom Math, a young startup run by his former 24-year-old student Carina Hong, shows how quickly the field is drifting toward superintelligence. Ono joined after realising how quickly the models were catching up, shaking comfort with his identity / career (here)

• Notable deal: Fluidstack (AI-focused cloud infrastructure & GPU/TPU rental) in talks to raise >$700M, potentially led by Situational Awareness, the new fund started by ex-OpenAI researcher Leopold Aschenbrenner, as it scales beyond Nvidia GPUs into a pivotal distributor for Google’s TPUs (here)

Defence

• White House 2025 National Security Strategy presents a forceful vision of American renewal anchored in technological & industrial dominance & a recalibration of relations with Europe. Frames US as unapologetically sovereign & technologically nationalist, treating leadership in AI, quantum, bio, energy & financial infrastructure as instruments of state power. Europe is depicted less as a peer & more as a lagging variable - overregulated, economically declining & politically constrained (recommended reading here)

• In response to the above, The Economist argues Europe’s mainstream leaders are too focused on short-term diplomacy with Washington & risk missing this deeper ideological threat. To respond, they must build their own counter-narrative, policies & voter base. In doing so, Trump could become not a threat, but a catalyst for renewing centrist European politics (here)

• European Commission considering use of emergency powers to raise up to €210B for Ukraine by borrowing against frozen Russian state assets, beginning with €90B . Controversial because it could bypass EU member-state vetoes (from Russia-friendly countries such as Hungary). Belgium has been a central opponent because it holds ~€192B of Russian assets - mostly at Brussels-based Euroclear - exposing it to legal & financial risk. Under revised proposals, Commission aims to spread this risk across the bloc by drawing more heavily on Russian assets held in commercial banks (€18B in France & €7B in Belgian banks outside Euroclear) (here)

• UK government has launched Atlantic Bastion, a Royal Navy programme using autonomous vessels, sensors & AI-linked systems to protect undersea cables & pipelines in North Atlantic from rising Russian submarine activity - an important move given ~99% of UK’s international data travels via subsea cables & given Russias latest nuclear submarine launch caused a stir given with its advanced noiseproofing technology (here)

• Notable deals: Heven AeroTech (hydrogen fuel cell-powered long-endurance unmanned aerial systems for defence, public safety & commercial missions) raised $100M at $1B & Antares (compact nuclear microreactors for remote bases, industrial sites & future deep space/underwater missions) raised $71M plus $25M debt (here & here)

Security

• ServiceNow’s $1B Veza acquisition signals a clear identity + ITSM consolidation play to own “who has access to what” across cloud & SaaS (here)

• Notable deals: 7AI (AI agents for security operations) raised $130M at $700M, Verkada (cloud-managed video security, access control & sensors) raised $100M at $5.8B, Axiado (security & system-management chips for digital infrastructure) raised $100M, Zafran Security (AI-driven threat exposure management) raised $60M, imper.ai (AI-driven impersonation & social engineering defence) raised $28M & Lumia (security & governance tools for autonomous AI agents) raised $18M

Energy

• A great write up / infographic from the FT on the US demand for power in the era of AI (see here)

  • From 2026, five new facilities (xAI, OpenAI, Meta, Microsoft, Amazon) will each draw ≥1GW of power — roughly the output of a nuclear reactor

  • US data centres total ~51GW of capacity; at full load, that equals ~5% of peak national electricity demand

  • By 2028, data centres will need an additional 44GW, but grid constraints mean only ~25GW of new power is likely to come online within three years

  • Hyperscalers (Amazon, Google, Meta, Microsoft) plan >$400B in capex; OpenAI alone has >$1.4T in infrastructure deals, implying ~28GW over eight years. Sam Altman has called the power shortage “existential”

  • In 2024, China added 429GW of new power capacity (>⅓ of the entire US grid, >½ of global growth), versus just 51GW in the US (12%)

  • Trump-era actions against renewables are being challenged in court; critics argue they weaken the fastest, cheapest way to add capacity. As Climate Power’s Jesse Lee warned: forfeiting the energy race risks forfeiting the AI race to China

• Rui Ma points out that “current forecasts through 2030 suggest that China will only need AI-related power equal to 1-5% of the power it added over the past five years, while for the US that figure is 50-70%” (here)

• The demand for use in cooling in Sydney alone is expected to exceed the volume of Canberra’s total drinking water within the next decade (here)

Critical Resources

• Guinea started exporting iron ore from Simandou (a 3B-tonne deposit worth about $315B) after decades of delay. The $20B project, backed by Chinese state firms & Rio Tinto could push prices from ~$100 to ~$70/tonne by flooding the market. Simandou underlines how China is using capital-heavy ventures to reshape commodity markets & extend strategic influence in Africa (here)

• On December 3rd, the EU agreed to end all imports of Russian natural gas by September 2027. However, it continues to import significant volumes of Russian fertiliser made from gas - more than before the war for some products - leaving Europe’s food security partly dependent on an adversary, with higher EU tariffs unlikely to fully stem the flow (here)

Robotics

• Chinese startup AgiBot said the number of humanoids it has manufactured just reached 5,000, hitting a new milestone in its mass production, with another Chinese rival UBTech aiming to deliver 500 units this year (here)

Space

• SpaceX supposedly aims for a 2026 IPO after hitting an $800B valuation (here)

• Sam Altman (OpenAI CEO) has explored a deal to build a competitor to Elon Musk’s SpaceX, having publicly talked about the possibility of developing ‘a rocket company’ & data centres in space (here)

EVs

• Waymo’s once-cautious robotaxis are now driving more like impatient humans as the company tunes them to be “confidently assertive” (here)

• Despite having only 400 cars on the road in San Francisco versus Lift’s 50,000 drivers, Waymo has the larger market share

Crypto / Stablecoins

• Microstrategy’s enterprise value is now trading at c.1.16x its Bitcoin holdings… (here)

• Anthropic disclosed that AI agents were able to exploit a significant share of smart contracts in a controlled environment, generating a simulated haul of $550M (here)