Venture Geopolitics Issue 35
17 Feb 2026
Europe’s banks are again pushing to reduce reliance on American payment giants Visa and Mastercard through a pan-European alternative, Wero. Policymakers, including ECB President Lagarde, argue that routing trillions in payments through non-European infrastructure creates not just economic leakage but strategic vulnerability — putting sovereignty at the center of the debate.
From a European VC perspective, building commercially massive fintech companies in Europe that strengthen our financial system and generate significant value is absolutely the right ambition! But framing payments primarily as a sovereignty issue risks conflating industrial policy with security concerns.
Finance ecosystems function best when globally integrated, and sovereignty arguments should remain proportionate rather than driven by geopolitical reflex.
The question is whether economic policy is being “sovereignty-washed,” and whether payments — where network effects and consumer habits are deeply entrenched — are the right technological frontier on which to spend scarce political and financial capital, versus other, more strategically fragile dependencies.
We should be careful not to drift toward nation-state economic logic for its own sake, as doing so too broadly will only make us weaker.
Publics/IPOs
IPO calendar quiet as Feb’s audited-results take priority. While the pause is seasonal, it is being amplified by unstable tech valuations & buyers unwilling to price AI-related uncertainty into long-duration listings (here)
Clear Street (broker) has postponed its IPO after ‘slashing its proposed deal size by 65%’ while Japan’s PayPay (fintech & payments) has filed & could raise ~$2B as early as March
Wall Street’s IPO chatter around SpaceX, OpenAI & Anthropic is being crowded out by a surge in tech debt issuance as hyperscalers finance capex. UBS projects global AI & tech issuance could reach ~$990B in 2026 as the big platforms race to fund close to ~$700B in annual capex, implying capital markets are becoming a key constraint on the AI buildout rather than demand alone (here)
Investors are largely refusing to “buy the dip” even after double-digit weekly declines in sectors such as trucking, wealth management & real estate. Notably, a small AI logistics firm’s white paper triggered the sharp sell-off in trucking & freight stocks - illustrating how AI disruption fears are spilling beyond software (here & here)
Alphabet reportedly lining up a 100-year bond to help fund its AI investment programme, an unusually long maturity for tech. ‘Century bonds’ are rare in the sector, with IBM’s 1996 deal often cited as one of the few precedents (here)
Cohere (enterprise AI models) told investors it reached roughly $240M ARR in 2025 with >50% quarterly growth & ~70% GMs as it positions for a potential IPO (here)
SpaceX is reportedly weighing a dual-class structure for a potential 2026 IPO, preserving Musk’s super-voting control with a minority stake (here)
Amazon is again exploring a marketplace to let publishers license content directly to AI companies, as lawsuits & private licensing deals proliferate. Would formalise training-data economics into a product, where publishers can set terms & prices & AI companies can buy “clean” access rather than scrape or litigate (here)
Microsoft has already rolled out a Publisher Content Marketplace & its AI chief Mustafa Suleyman says the company is pushing for AI “self-sufficiency” rather than dependence on OpenAI (here)
ByteDance’s Seedance 2.0 (video-generating AI model) went viral in China as a “DeepSeek-style” moment for consumer attention. The model is aimed at film, e-commerce & advertising production, drew public praise from Elon Musk & reportedly generated tens of millions of clicks on Weibo (here)
Elliott took a stake in London Stock Exchange Group (exchange & financial data) as investors worry AI tools could erode demand for data & analytics. LSEG shares are down ~35% over the past year, and Elliott is reportedly pushing for a multibillion-pound buyback & higher margins versus peers such as S&P Global & Intercontinental Exchange; LSEG recently completed a £1B buyback (here)
Arm is trying to capture more of the AI value chain by moving from selling “blueprints” to selling larger pre-built blocks & potentially edging toward designing chips, which risks upsetting customers that liked Arm because it didn’t compete with them. Arm designs sit in almost all smartphones & most connected devices, with 300B+ Arm-based chips shipped historically & 30B+ shipped last year alone (here)
EY flagged Meta’s decision to keep a $27B data-centre project off-balance-sheet as a critical audit matter, adding fuel to scrutiny of AI-related financing (here)
Meta plans to launch facial recognition on its smart glasses after previously scrapping the feature in 2021 amid ethical concerns. An internal memo reportedly framed the timing as favourable because civil society groups will be distracted (here)
Big Dogs
Anthropic closed a $30B fundraise at $380B, doubling its valuation since September as IPO talk grows and big strategics deepen ties (here)
Anthropic committed $20M to a new super PAC backing candidates favouring stricter AI regulation, sharpening a political split with OpenAI-aligned networks (here)
Anthropic said it will cover consumer electricity price increases tied to its expanding data centres, fund 100% of required grid upgrades & invest in new generation capacity (here)
xAI lost 2 more co-founders, meaning 6 of its 12 founding members have now exited as the company heads towards an IPO. Musk described the departures & broader churn as a deliberate reorganisation to “improve speed of execution” but the optics are material from a governance & talent perspective (here)
OpenAI’s first hardware device is now expected no earlier than Feb next year as timelines for consumer hardware remain long even for the largest labs (here)
OpenAI disbanded its mission alignment team that was created in 2024 to support the company’s stated “benefits all humanity” mandate. Whatever the internal rationale, it will be read externally as a shift from governance-first posture to product & revenue urgency (here)
Grafana Labs (observability software) is reportedly raising at $9B as monitoring becomes critical infrastructure for AI-heavy systems (here)
Venture Capital
Andreessen Horowitz is a central force in Trump-era AI policy discussions as it lobbies for lighter regulation aligned with portfolio interests. Bloomberg describes frequent consultation with White House officials, which matters because it tightens the loop between cap tables & policy outcomes for foundational technologies (here)
Primary Ventures (seed & pre-seed VC) raised a $625M Fund V (here)
Elaia (early-stage European B2B deep tech VC) raised €120M first close for its fifth Digital Venture fund (here)
Denmark’s EIFO is looking to back more VC funds investing in defence tech as European rearmament becomes a capital allocation theme. Sovereign LPs are increasingly shaping the supply of venture capital by setting priority sectors rather than only allocating by returns (here)
AI acquihires are booming, with 5,700 AI & ML acquisitions from 2020–2025 and most deals keeping prices undisclosed. Tomasz Tunguz notes only 21% disclosed value, while the 75th percentile deal size rose from $82M in 2020 to $248M in 2025, suggesting a market where small teams are being absorbed quickly & quietly at rising prices (here)
Regulation
The FTC formally warned Apple not to “suppress” conservative outlets in Apple News, escalating political scrutiny of content curation on preinstalled platforms, after citing research claiming no conservative-leaning articles were featured while hundreds from liberal publications were promoted (here)
Hollywood’s Motion Picture Association accused ByteDance of large-scale copyright infringement after viral clips from its Seedance 2.0 video model featured celebrities & copyrighted characters, calling on the company to cease activity it said violated US law “on a massive scale” in a single day (here)
The Bank of England’s stablecoin proposal is being criticised as too cautious, with suggested holding caps of £20k for individuals & £10M for businesses. Industry groups argue the limits would restrict real-world usage & weaken UK competitiveness in regulated digital money (here)
YouTube argued in court it is an entertainment platform like Netflix, not addictive social media, as a major trial tests whether design can create addiction liability. The case matters because it puts product features - feeds, recommendations, notifications - closer to “duty of care” standards rather than pure speech protections (here)
The US Department of Homeland Security has issued hundreds of administrative subpoenas to Google, Meta, Reddit, Discord & others seeking identifying data on accounts that track or criticise ICE, using powers that do not require prior judicial approval (here)
The FTC intensified its antitrust probe into Microsoft’s cloud & AI businesses, requesting information from rivals on licensing & bundling practices. The focus includes how AI, security & identity tools may be packaged into Windows & Office, which could become a key test of whether “AI bundling” is treated as product integration or market power (here)
Venture Geopolitics
Google urged the EU not to “erect walls” around its tech sector, warning that sovereignty-driven localisation rules could fragment markets & slow innovation, as Brussels debates measures to favour European providers in cloud, AI & payments. Google’s top legal officer, Kent Walker, urged Brussels to pursue “open digital sovereignty” which would allow the bloc to “have control over key technologies, but also take advantage of the world’s best technologies” (here)
UN Secretary-General António Guterres urged governments to “move past GDP” & overhaul accounting systems to measure outcomes people value, not only output. The argument is that GDP misses environmental depletion and resilience & that existing measures underprice planetary risk & overprice short-term extraction (here)
Prediction markets are becoming credible macro sensors as Kalshi & Polymarket volume rises to $60M+ wagered daily on economic & political contracts. Academic work cited by the NYT suggests bettors can match or beat Wall Street economists on jobs, inflation, Fed moves & earnings, creating a parallel “market of expectations” outside traditional finance (here)
The UK is considering fresh sanctions on Russia after concluding, alongside Sweden, France, Germany & the Netherlands, that Alexei Navalny was likely killed using a dart frog toxin arranged by the Russian state, with Foreign Secretary Yvette Cooper calling the finding “deeply serious” after two years of forensic analysis. The five countries have referred the case to the Organisation for the Prohibition of Chemical Weapons, arguing the toxin - epibatidine, not naturally found in Russia - could not have been ingested accidentally. Moscow denies involvement & dismissed the claim as western “necro-propaganda” (here)
Munich Security Conference opened under a changed US tone, with Marco Rubio defending Trump’s foreign policy while calling for transatlantic unity. Rubio explicitly criticised “rules-based order” language as an overused term & argued sovereignty & reindustrialisation should trump globalised assumptions, while still urging Europe to align with US priorities (here)
The Pentagon moved to add Alibaba, BYD & Baidu to its “Chinese Military Companies” list, signalling alleged ties to Beijing’s military-civil fusion strategy ahead of a planned Trump-Xi summit (here)
European leaders are again discussing sovereign payment rails as US trade pressure & Greenland threats revive fears of dependency on American finance & tech. Visa & Mastercard process ~$24T annually, handling 56% of EU cashless payments, meaning transaction data & infrastructure remain outside European control. ECB chief Christine Lagarde warns this poses data-sovereignty & geopolitical risks, on top of the ~€300B in European savings that flows to the US each year. In response, Europe’s EPI–EuroPA alliance is seeking to launch the Wero wallet, linking 130M users across 13 countries & EU politicians again backed the digital euro, with the ECB framing it as reducing dependence on foreign providers & targeting broad availability by 2029 (here)
Brussels plans to require electric vehicles receiving subsidies to contain at least 70% EU-made components & be assembled in the bloc, aiming to protect European industry from Chinese competition, though carmakers disagree over costs & practicality (here)
Russia blocked WhatsApp nationwide, citing data localisation & extremism concerns, tightening digital controls as Western platforms remain restricted. Meta’s messaging service had remained one of the last widely used US-owned social apps in Russia after Facebook & Instagram were banned in 2022 (here)
A Russian policy memo reportedly floated a path back toward partial reintegration with the dollar system, pitching proposals to Trump-aligned interlocutors – the document outlines steps Moscow could take to stabilise trade & financial flows under sanctions, signalling interest in easing isolation without abandoning strategic autonomy (here)
Strategic Sectors
AI
OpenClaw founder has joined OpenAI & the OSS bot will becomes a foundation supported by OpenAI (here)
Something Big is Happening by Matt Shumer (here). Worth reading!
US data center and software investment now >$1T annualized (3.5% of GDP) (here)
Azeem Azhar argues how “everyone’s looking for a bubble. No one sees the stampede”. He argues the main risk is not over-investment but capacity constraints. He cites “industry strain” (investment-to-revenue) falling from 6.1x to 4.7x in 5mo, with a path towards ~3x by Q2 if the trajectory holds i.e. revenues begin carrying the installed base. He points to cloud growth: Google Cloud +48% YoY to $17.7B, AWS +24% to $35.6B, Azure +39% with contracted backlog up 110% to $625B (~45% tied to OpenAI). Estimates AI at ~23% of Google Cloud, ~10% of Azure & ~5% of AWS in the latest quarter. Cites BofA reporting coding tools cut development time by 30% (roughly 2,000 FTE equivalent) & Norway’s ~$2T sovereign wealth fund using Claude for portfolio monitoring with estimated $17–32M annual labour savings. The claim is that AI has moved from experimentation to operational infrastructure (here)
OpenAI said China’s DeepSeek continues to distil US frontier models into lower-cost systems, intensifying model IP tensions between Washington & Beijing (here)
Zhipu released GLM-5 as an OSS model with upgrades for coding & long-running tasks & claims benchmark performance approaches leading US models. Reuters reports it was trained on domestically-produced chips including Huawei Ascend, fitting China’s push to reduce reliance on imported Nvidia hardware (here)
MiniMax launched OSS flagship model, M2.5, as Chinese labs push “good-enough” coding & agent tools at lower prices to win developers globally. MiniMax went public in Hong Kong last month & its shares rose nearly 10% after the M2.5 announcement (here)
METR published model projecting near-full automation of AI R&D around 2032, driven by continued improvements in AI coding (here)
Spotify says top developers have not written code since December, instead directing an internal system called Honk built on Claude. Engineers reportedly review outputs on phones, a sharp illustration of how “agent-assisted development” is moving from pilot to default in some teams (here)
Mistral disclosed $400M+ ARR & plans €1.2B data centre in Sweden as it pushes a European sovereignty narrative. The Borlänge facility is being built with EcoDataCenter, planned to be operational from 2027, while Mistral says run-rate grew from ~$20M a year ago & could surpass $1B by year-end! (here)
Notable deals: Multiverse Computing (model compression) discussing ~€500M at >€1.5B, after reaching ~€100M ARR in January. Runway (generative video) raised $315M at $5.3B (here). Modal Labs (inference infrastructure) reportedly exploring a new round at ~$2.5B, up from $1.1B less than 5mo ago (here), Olix (photonic AI chips) raised $220M at $1B post-money (here)
Energy / Climate
IEA forecasts global electricity demand through 2030 to grow 50% faster than the past decade, as consumption from industry, electric vehicles, air conditioning & data centers increases (here)
Trump administration repealed the scientific “endangerment finding”, removing the federal government’s legal basis to regulate greenhouse gas emissions (here)
Inertia Enterprises (fusion lasers) raised $450M, Tem (AI-driven electricity trading) raised $75M at $300M+, Alva Energy (nuclear reactor upgrades) raised $33M
Critical Materials
Hades (ultra-deep drilling) raised ~€15M to use high-power laser drilling for critical minerals & deep geothermal, targeting faster & cheaper extraction in hard rock. Europe produces <3% of the critical minerals it consumes & imports most lithium, rare earths & cobalt, which turns extraction capability into an industrial & geopolitical constraint; the company frames deep drilling as a technology bottleneck rather than a resource scarcity problem (here)
Cybersecurity
Amazon’s Ring ended a partnership with Flock Safety amid surveillance backlash over linking consumer doorbells into law enforcement camera networks (here)
Germany is drafting legislation to authorise offensive cyber operations & expand intelligence powers as it responds to rising foreign threats (here)
Notable deals: Vega (security analytics without centralising data) raised $120M, GitGuardian (credential leak detection & non-human identity management) raised $50M, Backslash Security (securing AI-driven app development workflows) raised $19M Series A
Defence
France & Germany have opened high-level talks on creating a stronger European nuclear deterrent as doubts grow over long-term US security commitments. France already maintains a fully independent nuclear force, unlike Britain whose Trident system relies on US cooperation for maintenance & upgrades. Paris is also estimated to possess ~54 air-launched tactical nuclear weapons. The US currently deploys >100 smaller B-61 tactical bombs across Europe under NATO nuclear-sharing arrangements. As a result, some defence figures argue Europe should consider developing smaller, more targeted nuclear capabilities (here)
Poland’s president, Karol Nawrocki, has said the country should move towards joining a nuclear project to counter what Warsaw sees as Russia’s aggressive posture on its border, reflecting wider European concern that US security guarantees may be weakening and prompting discussions about strengthening Europe’s own deterrent; however, experts say Poland is unlikely to build its own weapons and is more likely to join NATO nuclear-sharing or seek protection under French or British nuclear umbrellas (here)
A UK defence tech cluster built on legacy aerospace expertise is ‘shifting from Spitfires to drones’ with companies repurposing historic industrial sites for autonomy & unmanned systems, as government orders & Ukraine-driven urgency revive regional manufacturing. The cluster blends primes, SMEs & start-ups, with demand focused on loitering munitions, counter-drone systems & battlefield software (here)
India approved the acquisition of 114 Rafale jets in a deal worth €30B+, anchoring France as a long-term defence partner & strengthening Europe’s export position. If completed, it could be the largest contract in Dassault’s history & signals New Delhi’s willingness to lock in European platforms at scale (here)
Western intelligence officials say recruiters linked to Russia’s Wagner Group are now being used as a conduit for sabotage operations across Europe, targeting economically vulnerable individuals to carry out attacks on NATO soil, as Moscow compensates for depleted official spy networks after diplomatic expulsions (here)
The Pentagon reportedly used Anthropic’s Claude via a Palantir contract to capture Venezuela’s Nicolás Maduro, despite Claude guidelines barring violence or surveillance use (here)
Israel charged two individuals for allegedly placing bets on Polymarket tied to sensitive military operations, raising questions about prediction markets intersecting with national security – prosecutors claim the defendants used non-public information relating to Israeli defence actions to place wagers on outcomes, highlighting how decentralised, crypto-based platforms can create financial incentives around real-world conflict events (here)
Germany is testing whether rearmament can be economic stimulus, with defence spending projected at €108B this year (2.8% of GDP) but bottlenecks slowing conversion of orders into output. The Bundestag approved a €500B climate & infrastructure fund & excluded most defence spending from the “debt brake”, while the government aims for 3.5% of GDP on defence by 2029; defence spend has risen from €47B in 2021 to €108B projected this year. Yet overall manufacturing output is still ~15% below its 2018 peak & Germany is shedding ~14,000 manufacturing jobs a month, so the question is whether new weapons & infrastructure orders spill over into broader industrial renewal fast enough - or just create backlogs (here)
Ditto, Canada. Canada plans to raise defence spending to 5% of GDP over the next decade & direct 70% of procurement to domestic firms, aiming to create 125,000 jobs & reduce reliance on US manufacturers, according to a new strategy paper. Ottawa intends to use national security exemptions to favour Canadian suppliers, potentially revisiting its 88-jet F-35 order & seeking alternative submarine deals, while building closer defence-industrial links with the EU, UK & Indo-Pacific partners (here)
Europe hit a record $8.7B in defence, security & resilience investment in 2025, up 55% YoY, with deep tech flowing into autonomy, compute, quantum & space. Dealroom says 43% of European deep tech went into the category, with the UK leading at $2.9B & Germany next at $2.1B, and Munich the top city followed by London & Cambridge (here)
Anduril (autonomous systems) is discussing a new fundraise at $60B+! The company expected revenue to roughly double to about $2B last year, but told investors it also expected to burn $800M-$900M (here)
Notable deals: Stark (drones) raised undisclosed amount above €1B valuation & wll sign new contract with German armed forces in the coming weeks, worth €2.4B, Constellr (thermal intelligence satellites) raised $44M, Integrate (secure collaboration for government & defence) raised $17M
Robotics
Notable deals: Apptronik (humanoid robots) raised ~$520M at $5.5B+ as strategic investors back general-purpose automation (here), Trener Robotics (industrial robot training via natural language & simulation) raised $32M as factories test “promptable robotics” workflows (here
EVs/AVs
Aurora (autonomous trucking) says its driverless trucks can run a 1,000-mile Fort Worth–Phoenix route in ~15 hours versus 24+ hours for human drivers (here)
Space
Orbex’s collapse after takeover talks with The Exploration Company fell through has triggered a domestic scramble to keep UK launch assets & IP from drifting abroad. Skyrora, the first British company to receive a UK launch licence from the CAA, said it is potentially interested in acquiring Orbex assets including the Sutherland spaceport, framing it as preserving UK capability & “independent” access to space (here)
Europe’s Ariane 6 completed a high-visibility success by placing 32 Amazon satellites into orbit, strengthening Europe’s launch credibility & capacity (here)