Venture Geopolitics Issue 26
16 December 2025
The freezing of the US–UK tech prosperity deal, the absorption of engineers into government via the “Tech Force” and the federal overruling of state-level AI laws all point in the same direction: when you deal with the US today, you are dealing with the American state as a coordinating actor. This concentration creates leverage over allies and rivals alike.
China runs a version of this model. Beijing’s emergency Nvidia meetings, chip smuggling routes (including evidence that DeepSeek trained on restricted Blackwell systems) and a fresh $70B push for the chip sector reveal a state with tight control over critical dependencies coercing firms into domestic substitution.
The US is not importing China’s ideology - but it is converging on a familiar structure: étatism, the French state-building model refined from Colbert through post-Napoleonic industrial planning.
Étatism is not socialism or nationalisation, nor is it hostility to private capital. Firms remain private, but are functionally embedded in state strategy. Power flows through concentration - of capital, labour, technology and law - allowing the state to coordinate outcomes at scale. Historically, this model delivers elite coherence, high state capacity and rapid catch-up in capital-intensive sectors —precisely why post-Napoleonic France used it to build infrastructure, industry and administrative reach. But the trade-offs are structural: democratic thinning, bureaucratic overreach and elite closure with an ideologically homogeneous governing class. Over time, the same system struggles with innovation and adaptation.
Public / IPOs
S&P 500 & Nasdaq saw their steepest daily declines in 3+ weeks as inflation jitters met debt-fuelled AI capex nerves, with softer-than-hoped results from Oracle & Broadcom setting the tone. This week also started soft as markets price in a heavy US data run (delayed jobs, payroll, retail, business activity & inflation data given the recent shutdown) (here)
Meesho (e-commerce marketplace) +53% on a $603M Mumbai IPO debut (here)
Wealthfront (robo-adviser) priced at the high end but finished ~+1% (here)
ServiceNow (enterprise workflow software) dropped 11.5% after reports it’s in advanced talks to buy Armis (cybersecurity) for ~$7B, briefly wiping ~$21B off its market cap (here)
Google continues to run hot: launched an updated Gemini Deep Research assistant & shipped Disco (Gemini-powered browsing that turns your tabs/history into interactive pages), while signalling ads could arrive in Gemini in 2026. Google also added a small “+” upload option inside Search’s AI mode experience & said AI glasses are coming next year (here, here and here
Meta internal AI politics: Zuckerberg built a separate AI lab led by Alexandr Wang, with reported budget/compute reallocations & tension between superintelligence ambition vs supporting the core ads business (here)
Big Dogs
OpenAI launched GPT-5.2 tiers “firing back” at Google - “Instant”, “Thinking” & “Pro” - pushing reasoning, coding & long-context to win enterprise workflows (here)
Disney agreed a 3-year deal with OpenAI, including a $1B stake, to bring characters to Sora (short-form video) while excluding talent likenesses/voices (here)
OpenEvidence (clinical AI search for doctors) raising $250M at $12B, ~2x its valuation from 2mo ago. OpenEvidence helps doctors find health info from medical journals & trusted sources using AI (here)
Venture Capital
Lightspeed raised $9B across vehicles including a $3.3B opportunity fund for follow-ons, while Dragoneer closed a $4.3B new venture fund - more dry powder for mega AI rounds in an otherwise bleak VC fundraising year.
US VC firms raised ~$45.7B in new funds in the first 9mo of 2025 - tracking toward the lowest annual level since 2017 (here)
European VC fundraising “down 60% YoY” recently reported by Pitchbook, but Dealroom suggests more like -24% vs 2024: ~$20.5B raised so far in 2025 vs $27.1B in FY24.
UK fundraising is the outlier: ~$3.7B so far in 2025 (-56% vs 2024), taking UK share of European VC fundraising to ~18% (vs a typical 30%-40%).
France is the mirror image - ~$5.1B so far in 2025, an all-time high (here)
Venture Geopolitics
Washington has suspended the UK-US “tech prosperity deal” announced in September, citing UK reluctance to move on non-tariff barriers; UK officials say US demands have spilled beyond tech into broader trade concessions (food standards, industrial rules) (here)
Trump administration has launched a 2-year programme (Tech Force) recruiting engineers into federal agencies to work on large-scale civic/defence tech & AI, reporting to agency leadership, with pay cited at ~$150k-$200k & partner companies including Google, Meta, Apple, OpenAI & xAI. This is a new flavour of public-private rotation - government gets talent and vendor adjacency, companies get proximity to requirements, procurement pathways & the definition of “critical” (here)
New MI6 chief Blaise Metreweli warned power is shifting from states to corporations/individuals. “This is not a temporary state or a gradual, inevitable evolution”. According to Blarise, our world is being actively remade with profound implications for national and international security. “Power itself is becoming more diffuse, more unpredictable as control over these technologies is shifting from states to corporations and sometimes to individuals” she said (here)
China convened emergency meetings with top tech firms to assess whether to approve purchases of Nvidia’s H200 chips after US export policy whiplash - a near-term dependency problem colliding with Beijing’s self-sufficiency goals (here)
DeepSeek (AI lab) is reportedly training with Nvidia Blackwell chips smuggled into China via third-country data centres, then shipped in parts - the supply chain is sanctions arbitrage-as-a-service (here)
Beijing preparing up to $70B in new chip-sector incentives, on top of existing funds, to accelerate import substitution & push domestic stacks. Will back champions like Huawei, SMIC, Cambricon & Moore Threads. Plan pairs fresh subsidies with tighter guidance to swap in domestic components, sidelining Nvidia’s China-specific chips and keeping higher-end imports at bay despite recent US policy shifts (here)
MGX (UAE-backed fund) has quietly become a top-tier global data-centre financier - set to be the biggest shareholder in Aligned Data Centers after its $40B sale, with a minority stake in Vantage Data Centers (tied to OpenAI’s Stargate) plus builds in France & Italy (here)
Netflix, Paramount and Warner Bros continue to dominate headlines. Regardless which company buys Warner it is “imperative that CNN be sold” for Trump - for him, the deal represents a second chance to take aim at CNN. During his first term, the Justice Department unsuccessfully tried to block a sale of CNN’s parent company, then known as Time Warner, to AT&T unless the network was spun off (here)
xAI is partnering with El Salvador to roll out Grok in 5,000+ public schools over 2 years (here)
Regulation
White House moved to pre-empt state AI laws, directing the attorney general to challenge state rules that “obstruct” national AI policy & threatening federal funding levers, aiming for a single federal framework. The practical bet: fewer state-level constraints means faster deployment for US AI firms - the strategic bet: centralising rule-setting is itself a geopolitical tool (here)
PayPal applied to become a bank in the US via an industrial loan company charter, aiming to expand lending (esp small business) & reduce reliance on partner banks. Another signal of regulatory loosening - fintechs are pushing straight through the perimeter rather than renting it (here)
US Supreme Court appears poised to expand presidential power in a case about firing an FTC commissioner, potentially revisiting Humphrey’s Executor; justices flagged the question of whether the Fed is different, teeing up a separate confrontation involving Fed governor Lisa Cook. Translation: independence of “independent” agencies is becoming contested terrain in the US (here)
EU vs Google - the Commission opened an antitrust investigation into whether Google used publisher & creator web content for AI Overviews/AI Mode/model training without fair terms or compensation. Expect this to stay entangled with US-EU trade friction - content, competition & “sovereign AI” all in one dossier (here)
Trump filed a $10B lawsuit against the BBC alleging deceptive editing/defamation and pushing a “Leftist political agenda” when doctoring his Jan 6 speech (here)
Strategic Sectors
AI
Gemini vs ChatGPT competition: Aug–Nov: Gemini global site visits roughly doubled while ChatGPT grew ~1%; MAUs: Gemini +~30% to 346M vs ChatGPT +~5% to 810M, with Google’s distribution (Search, Android, Workspace) likely making its real reach meaningfully larger than standalone traffic suggests (here)
Runway (generative video) launched GWM-1, its first “general world model” family, including a model aimed at robotics training (here)
Thinking Machines (AI lab) made its Tinker fine-tuning software generally available & added Kimi K2 Thinking (here)
Nvidia released Nemotron 3 open models for building agentic AI (here)
Fermi (AI data-centre campus developer) disclosed a prospective anchor tenant ended a deal tied to its West Texas “Project Matador” site, including up to $150M of funding support; the stock fell >40% in a day, a reminder that AI infra is still a chain of bilateral contracts, not an inevitability (here)
AI debt hedging: CDS volumes tied to big US tech jumped ~90% since September as investors price the risk that bond-funded AI infra takes longer to pay back; activity is especially notable around Oracle & CoreWeave (here)
Digital Risk
Cambridge Online Trust & Safety Index put hard numbers on the “online manipulation economy”; 12 mo of data to July 2025 found average SMS verification prices of $4.93 (Japan) & $3.24 (Australia) vs $0.26 (US), $0.10 (UK) & $0.08 (Russia), with Telegram/WhatsApp fake-account prices spiking ahead of some national elections (here)
Interesting deal - Saviynt (identity governance) raised $700M (here)
Defence
US officials say negotiators have agreed a NATO-like guarantee framework with Ukraine & European partners as part of a peace proposal Russia could accept; the idea centres on credible post-ceasefire deterrence (force readiness, monitoring, enforcement) rather than immediate membership, with Europe expected to shoulder the visible footprint & the US the backstop (here)
Iran staged a public missile & drone exhibition in Tehran aimed at normalising / celebrating military capability - school trips, families, photos, hardware-as-theatre (here)
Lithuania declared a state of emergency after repeated balloon incursions from Belarus disrupting aviation; authorities say smugglers use the balloons to move contraband (notably cigarettes), framing it as a hybrid security issue (here)
Interesting deal - ICEYE (SAR satellites) raised €200M, taking it to ~€2.4B, with capital aimed at scaling “sovereign” earth-observation systems as European defence buyers prioritise independent ISR supply (here)
Energy
BloombergNEF now expects US data centres may need ~40% more power by 2035 than it forecast just months ago (here)
Interesting deal - Fervo Energy (enhanced geothermal) raised $462M, applying oil & gas drilling techniques to make geothermal viable beyond natural hotspots, with Google helping de-risk offtake by backstopping power costs (here)
Crypto
JPMorgan pushed further on-chain: arranged a $50M Galaxy Digital commercial paper issuance executed on Solana, then launched a tokenised money-market fund (MONY) on Ethereum seeded with $100M, both framing public chains as settlement rails rather than ideological toys (here)
World (biometric ID project co-founded by Sam Altman) shipped a “super app” update adding end-to-end encrypted chat plus Venmo-like send/request crypto flows, with verification signals integrated into messaging (here)
UK plans to bring crypto fully under existing financial services laws by October 2027, moving from light-touch oversight to FCA-style regulation (here)
Trump is pushing the SEC to make crypto accessible inside 401(k)s (here)
EVs/AVs
Tesla is testing driverless robotaxis without a front-seat safety monitor, per Musk - a step change from supervised pilots & a key credibility milestone ahead of “Cybercab” ambitions (here)
Rivian is designing in-house autonomy semiconductors (Rivian Autonomy Processor) to process camera/LiDAR/sensor data & launched an AI foundation model for driving, leaning into vertical integration to control cost curves at scale (here)
Ford is taking a $19.5B hit as it overhauls EV strategy, scrapping or delaying several flagship EV programmes while pivoting harder toward hybrids/extended-range, citing demand realities & shifting US policy incentives (here)
EU 2035 debate - the Commission is expected to soften the effective ban on new petrol/diesel sales after 2035, potentially allowing limited volumes of non-zero-emission vehicles or carve-outs for plug-in hybrids/synthetic fuels, with critics warning policy uncertainty benefits Chinese EV incumbents more than European laggards (here)
Quantum
German researchers demonstrated quantum teleportation using telecom wavelengths compatible with existing fibre (around 1,515 nm), meaning the “carry” signal can travel on today’s internet-grade cables with low loss - a practical constraint for any future quantum network (here)
Space
Interesting deal: K2 Space (high-power satellite platforms) raised $250M at $3B to scale “Mega Class” spacecraft buses built for the heavy-lift launch era - essentially bigger, higher-power, more payload-flexible satellites that can support comms, sensing & on-orbit compute without stitching together fleets of tiny spacecraft (here)