Venture Geopolitics Issue 29
06 January 2026
Happy New Year! I hope the holidays gave you a chance to properly switch off. Issue 27 and Issue 28 recap the key headlines you may have missed over the break - and as ever, the past week has brought plenty more to get on with.
Operation Absolute Resolve was not just an assertion of power in the Western Hemisphere; it was an unusually explicit statement about sovereignty, resources & control. Markets reacted accordingly, treating US oil majors as immediate beneficiaries.
For a president elected on an “America First” platform that promised restraint abroad, the contradiction is stark & revealing.
What makes the episode more destabilising is not only the action itself, but the absence of a consistent narrative explaining it. In recent months, US officials have pointed to drugs, illegitimate elections & regional security. Over the weekend, Trump framed the operation as reclaiming oil rights Venezuela had “stolen”. These justifications are not cumulative; they are interchangeable. That lack of coherence makes evaluating US intent increasingly difficult & raises a deeper question: does public justification matter once power is sufficiently concentrated, or has information warfare itself become secondary?
The answer matters for Europe because this behaviour is not an anomaly; it is aligned with stated US doctrine. The National Security Strategy is explicit that US security depends on pre-eminence in the Western Hemisphere & the ability to “assert ourselves confidently where & when we need to”. What is new is how that power is exercised. US companies - including technology firms that sit inside Europe’s digital infrastructure, cloud systems, communications networks & public services - are now being treated as instruments of national security. This week’s reports that the US may have used cyber capabilities to disable infrastructure in Venezuela reinforce the point: technical systems are no longer just economic assets, they are tools of state power.
For Europe, this sharpens an uncomfortable reality. In a world where access to platforms, clouds & networks can be withdrawn or conditioned, sovereignty is no longer theoretical. The response Europe chooses now - whether to continue importing critical infrastructure or to build genuine sovereign capability - will do more than shape competitiveness. It will determine how exposed Europe is when geopolitics & technology continue to converge in 2026 & beyond.
IPOs / Public
Global markets are digesting the US operation that seized Maduro & Trump’s claim the US would “run” Venezuela. Equities steady/positive & oil majors (Chevron, Exxon Mobil) buoyed on the prospect of renewed access to Venezuelan barrels (here)
Shanghai Biren Technology (AI chips) jumped on Hong Kong debut after raising ~$717M as Beijing tries to substitute Nvidia supply (here)
Meanwhile, Baidu said its AI-chip unit Kunlunxin has filed confidentially for a Hong Kong listing (here)
Nvidia rolled out faster chips sooner than expected at CES (the annual Consumer Electronics Show in Las Vegas) - unveiling its Vera Rubin server systems, positioned around training 10T-parameter models in a month using 1/4 the chips vs Blackwell (here)
Microsoft renamed Office to the “Microsoft 365 Copilot app”. Apart from abysmal marketing, the front page is wildly inconsistent. “Welcome to Microsoft 365 Copilot”, “The Microsoft 365 Copilot app (formerly Office)”, “Microsoft 365 (formerly Microsoft Office 365)” (here)
Apple cut Vision Pro production & marketing after weak sales. IDC estimates just ~45k units shipped in Q425 (vs millions of iPhones). The product is expensive ($3,499), physically awkward for many users (weight/comfort) & accused of weak battery life - backdrop of an overall VR headset market down 14% YoY (here)
SoftBank agreed to acquire DigitalBridge (data centre investor) for $4B as part of its AI infra push. Expected to close in second half of 2026. Masayoshi Son (Softbank CEO & Chair) said the acquisition “will strengthen the foundation for next-generation AI data centers” & advance the firm’s vision to become a leading “Artificial Super Intelligence” platform provider (here)
Big Dogs
OpenAI is reorganising teams to upgrade its audio models in preparation for eventual release of an AI-powered personal device. Device is expected to be largely audio-based, but the LLM that powers the audio version within ChatGPT is a different one to the model that powers ChatGPT’s text-based responses. Current audio models lag the text-based models in the accuracy of their responses & how quickly they answer questions. As a result, over the last 2 months, OpenAI has unified several engineering, product & research teams around the goal of improving audio models for future devices. The company is aiming to release the new audio model in the first quarter of 2026 (here)
xAI bought a third building outside Memphis as it pursues a “1M chips online” goal - its advantage is vertical: converting warehouses fast, running its own cluster & increasingly pairing compute with power planning locally. The trade-off is political: proximity to neighbourhoods has made turbines/power sourcing a focal point for opposition (here)
Venture Capital
Over the past few weeks, VC commentary has been dominated by year-end reflections & New Year predictions. A few pieces worth calling out:
o AVC – Ten predictions for 2026
o Dragos Novac - 2026 investor predictions (featuring my colleague Ed) alongside his own reflections
o Sifted – AI predictions for 2026 (featuring my colleague Seb)
Bridgepoint agreed to buy a majority stake in Interpath (restructuring & turnaround advisory) at ~£800M. Interpath is the former KPMG restructuring unit carved out in 2021, now a standalone adviser on insolvencies, refinancing & stressed M&A. This is effectively PE buying the “picks & shovels” of corporate distress ahead of what many expect to be a tougher credit cycle (here)
PE firm Brookfield is launching its own cloud business, aiming to undercut tech giants like Amazon, Google, Microsoft & AI-focused rivals like CoreWeave/Nebius by lowering the cost of AI development. Effort is tied to a new $10B AI fund & a Brookfield-operated cloud company (Radiant). Brookfield plans to acquire up to $100B in land, data centers & power assets for AI, with projects underway in France, Qatar & Sweden. Brookfield is already one of the biggest owners of land, data centers & power including one of the world’s largest fleets of solar & wind power & is the majority owner of Westinghouse, which builds nuclear reactors (here)
Close to 80 European university spinouts hit $1B valuations or $100M revenue in 2025 - including Iceye (satellites), IQM (quantum), Isar Aerospace (launch), Synthesia (AI video) & Tekever (defence drones) (here)
Insight Partners is being sued by a former VP alleging disability discrimination, gender discrimination & wrongful termination (here)
Venture Geopolitics
The seizure of Maduro has landed as both geopolitics & market structure. Trump’s statement that the US would “run” Venezuela was unusually explicit about territorial influence & resource control. Markets responded by immediately pricing in renewed access for US oil majors. An important signal is that investors are once again treating US corporate access to markets, resources & infrastructure as a direct function of foreign policy. In practice, that means capital is being allocated on the assumption that alignment with Washington can determine who gets licences, contracts, connectivity & operating permission - a logic that extends beyond energy into technology, data, cloud infrastructure & payments, where access can be granted, restricted or withdrawn as a tool of state power rather than a neutral commercial outcome (here)
Taiwan’s “silicon shield” debate is intensifying as more chip production moves abroad. Taiwan remains the single most important location in the world for advanced semiconductors, with TSMC manufacturing >95% of the world’s most advanced chips & ~60–70% of all semiconductors. This concentration matters not just to the West, but to China itself: China imports close to half of Taiwan’s semiconductor output & relies on Taiwanese chips for consumer electronics, industrial equipment & military systems. Economists estimate that a conflict over Taiwan could cost the global economy around $10T (~10% of global GDP), with China taking a particularly severe hit because it cannot easily replace that supply. This mutual dependence underpins the “silicon shield” theory - that the economic damage to China would be so large it acts as a deterrent to invasion. The complication now is deliberate diversification: TSMC has announced +$100B of investment in the US, taking planned US spending to about $165B, alongside new factories in Japan & a planned site in Germany. While the most advanced manufacturing is still expected to remain in Taiwan, spreading production reduces global reliance on the island over time & weakens the cleanest version of the deterrence logic (here)
A large FT survey of economists (from the US, EU, China & UK) expects the US to maintain or widen its productivity lead, citing AI, deep capital markets & relatively low energy costs - US labour productivity up ~10% (2019-24) vs stagnation in the UK & Eurozone, which is the macro backdrop for why US capital can keep “buying the future” while Europe debates constraints (here)
A New York Times investigation into Trump’s unusually tight overlap between government policy & private profit details how the Trump family’s most lucrative recent activity has been crypto-related, including trading fees from the $TRUMP memecoin & ownership stakes in World Liberty Financial, a crypto firm founded with Steve Witkoff & their sons, which issues a stablecoin called $WLFI. That stablecoin was reportedly used to settle a $2B investment from Abu Dhabi-backed investors into Binance, highlighting how foreign capital, crypto payments & US political influence intersect. The picture the NYT draws is not of isolated conflicts, but of a system where policy decisions, foreign investment & private business interests increasingly move together, blurring the line between national strategy & personal enrichment (here)
Elon Musk posted a photo dining with Trump & the first lady, signalling a rapprochement - the relevance isn’t the dinner itself so much as the steady blurring of “political relationship management” into the operating environment for companies with federal contracts, export-control exposure or regulatory dependence (here)
Trump announced a new set of drug-pricing deals with nine drugmakers - the immediate reality is still that drugmakers plan to raise prices on at least 350 branded medicines in 2026 (median ~4%), even as negotiation-driven cuts show up on a handful of products (here)
Trump Mobile delayed shipping its promised gold smartphone ($499; ~$47.45/mo plan), blaming the government shutdown - the bigger constraint is industrial: “made in America” smartphones are still structurally hard given Asian component supply chains, with only a small fraction of iPhone parts made in the US today (here)
Regulation
According to Brussels, the EU is switching focus to enforcing the expansive digital rule book after years of negotiating legislation. Brussels is now applying the Digital Markets Act & Digital Services Act against major US tech platforms including Google, Meta, Apple & X. The move has already triggered retaliation, with Washington imposing visa bans on a former EU commissioner & four others over alleged coercion of American social media companies (see Issue 28). The FT has described 2026 as a collision year, as EU enforcement increasingly intersects with US politics (here)
OpenAI (again) asked a judge to dismiss xAI’s trade secrets suit - the dispute is becoming part labour-market story (poaching) & part narrative war over who is “stealing” what in the frontier-model race (here)
The EU’s Carbon Border Adjustment Mechanism (CBAM) is now live - a levy mechanism designed to make importers of carbon-intensive goods pay a carbon price equivalent to EU producers, aiming to prevent “carbon leakage”. Initially covers sectors including iron/steel, aluminium, cement, fertilisers, electricity & hydrogen. The decision to move ahead marks a major commitment to the EUs climate policy despite the macroeconomic & geopolitical headwinds, including opposition from countries like China, India & Brazil which argue it is a unilateral trade measure in environmental disguise. The UK is planning to introduce its own CBAM from Jan 2027 (here)
Macron said France will follow Australia’s lead & ban under-15s from social media & prohibit mobile phones in secondary schools in 2026 (here)
Indian officials ordered X to make changes to Grok flagging “obscene” content (here)
Strategic Sectors
AI
DeepSeek published work arguing for a cheaper approach to training foundation models (Manifold-Constrained Hyper-Connections, mHC) - the core claim is that architectural tricks can substitute for brute-force capex, lowering the barrier for challengers to compete with US labs that can spend tens of B on compute (here)
Consumers may face ~20% higher prices for electronics as AI demand tightens memory supply - the near-term mechanism is boring but powerful: more AI servers means more memory & packaging capacity absorbed upstream, which eventually shows up as higher BOM costs for phones, PCs & appliances (here)
Plaud (AI wearables) updated its NotePin (recording/transcription) device - now with a physical button, priced at $179, a data point that “audio capture + summarisation” is becoming a commodity form factor, not just an app feature (here)
Cybersecurity
President Trump said the US used “certain expertise” to turn off the lights in Caracas during the strikes that led to Nicolás Maduro’s capture. The chairman of the Joint Chiefs added that cyber & space units were used to help US forces reach their target. This us one of the clearest public examples of digital systems being used directly to support military action. Cyber disruption is often talked about, but it is rare to see it so openly linked to a live special forces operation, outside a handful of cases reported in Ukraine (here)
Belgium’s cybersecurity chief said the EU has “lost the internet” - the practical meaning: Europe cannot realistically keep data entirely in-Europe because US firms dominate cloud & key digital infrastructure & EU cyber defence capacity is therefore entangled with private US cooperation; he also criticised the EU AI Act as constraining innovation in the very tools needed for defence (here)
A hacktivist remotely wiped three white supremacist websites live onstage during their talk at a hacker conference last week, with the sites yet to return online. The pseudonymous hacker, who goes by Martha Root deleted the servers of WhiteDate, WhiteChild & WhiteDeal in real time at the end of a talk at the annual Chaos Communication Congress in Hamburg, Germany. The hacker said that they scraped WhiteDate’s public data & found “poor cybersecurity hygiene that would make even your grandma’s AOL account blush” (here)
Defence
Baltic states are on alert after 6 undersea cable outages in 6 days - officials cite bad weather/shallow waters as plausible contributors, but the pattern is hard to ignore; the strategic issue is that “grey zone” infrastructure disruption is cheap, deniable & forces costly hardening across telecoms + energy networks (here)
Iran’s defence export centre is offering missiles, drones & warships for cryptocurrency - one of the clearest public examples of a state signalling “we’ll take crypto” to bypass sanctions & payment rails, effectively turning digital assets into a parallel channel for strategic hardware trade (here)
Swebal (explosives) is trying to restart Europe’s TNT capacity - Europe’s only EU-based TNT maker had ~12k tonnes/yr capacity pre-Ukraine, but 2M shells/yr alone implies ~20k tonnes of TNT; Swebal’s planned 4.5k tonnes/yr plant (permits granted; opening targeted 2028) highlights the reindustrialisation bottleneck: not drones, but chemicals, permits, & a workforce willing to live near nitration lines (here)
Energy & Climate
Kraken (energy software platform) spun out of Octopus Energy with a $1B funding round valuing it at $8.65B - Kraken is essentially an operating system for billing, grid flexibility & device orchestration across >70M accounts; the strategic point is that energy transition increasingly runs through software layers that determine how demand, storage & renewables are coordinated (here)
EU recyclers say scrap is being “weaponised” by Chinese buyers - Europe collects efficiently (eg, high can collection rates), but exporters arbitrage the scrap out, leaving EU furnaces short & pushing policymakers toward export levies or recycled-content mandates (here)
Chinese wind giants are pushing into Europe - after subsidies faded at home & overcapacity squeezed margins, firms like Mingyang are moving abroad, colliding with European security concerns (remote updates, embedded electronics, potential surveillance) & European industrial anxiety (a solar-style wipeout risk) (here)
Robotics
Hyundai Motor Group plans humanoid robots in factories from 2028, showing Atlas (Boston Dynamics) at CES - the pace setter is no longer “can it walk”, but “can it be safe & useful around humans” (here)
In addition, Boston Dynamics partnered with Google DeepMind to speed up next-gen Atlas development - a clean example of foundation-model R&D moving into embodied systems (here)
EVs
Baidu (robotaxis) & Waymo (robotaxis) plan London launches in 2026 - making London a rare head-to-head theatre where US & Chinese autonomy stacks will operate in the same regulatory & urban environment (here)
Nvidia launched Alpamayo, pitched as an “open” vision-language-action reasoning model for driving - taking video + sensor inputs, applying language-based causal reasoning, outputting trajectories with explanations for auditability, while also announcing the Mercedes-Benz CLA as the first production car “powered by its tech” (here)
Crypto
Trump Media plans a crypto token distribution to shareholders in partnership with Crypto.com - another instance of public-market vehicles importing crypto mechanics into equity-holder incentives (here)