Venture Geopolitics Issue 41
31 March 2026
There has been an enormous amount of talk about British military spending this week. Is the UK spending enough on defence? how are we spending it?
Headlines have focused on our % GDP commitment to NATO (“3rd to 14th”, “bottom of the class”), while UK defence startups are complaining they are not getting the contracts or reduction in red tape they need to build domestic sovereign capability, so may as well move to the US.
These are real and important issues, but the media machine is painting over an equally urgent question: not just how much we should spend, but what are we spending it on?
Its a complicated issue (hence DIP delays). But the idea that you can encapsulate a nations commitment to defence by a proportion of GDP is arguably ludicrous - what do we even mean by defence? how are we fulfilling the needs of defence? what measures should we use to test effectiveness?
A strategic defence plan should start with our vulnerabilities - a foreign company providing domestic surveillance? being wholly dependent on foreign GPS? whether our nuclear deterrent is genuinely sovereign? our food and energy security?
This week, Trump suggested that NATO spending less than 5% of their GDP on defence should be excluded from the blocs decision making. This feels like the thin end of the wedge, and thus perhaps one of the biggest vulnerabilities of all.
We are at risk of being strong armed into spending our defence budget on a war we did not choose to enter. A war MAGA has (again) been revealed to seek personal profit from. Led by a leader that has not spoken out against Putin, but has criticised allies including the UK, Canada, Greenland, Denmark, and just today France. Nato is being asked for help and being told of no help at same time, whilst being called cowards to boot.
Meanwhile, we are directing large sums of that budget to a company embedded within that same kleptocratic system - from a quarter-billion-pound MoD contract to a £1bn NHS data deal (which faced more scrutiny and backlash this week, including in the US).
We should not be fixated on % of GDP spent on defence as a scoreboard against our allies. We should be asking how well defended we actually are, what we are defending against - and whether our choices about dependency, data and allegiance are consistent with those answers.
IPOs / Publics
Worst week for Nasdaq since ‘liberation day’. Index now down 5 weeks in a row & 8 of last 9 weeks. Mag7 losing $800B of mkt cap last week alone (here)
US memory chip stocks lost $100B as Google’s TurboQuant research suggested AI models can run on much less memory without accuracy loss - Micron shed $70B (down 15%), SanDisk lost $15B (here)
Anthropic is discussing a Q4 IPO that could raise $60B whilst preparing Claude Mythos, its next flagship AI model that reportedly represents a ‘step change’ in performance & carries ‘unprecedented cybersecurity risks’ (here)
Moonshot AI (Kimi chatbot) is restructuring from Cayman Islands incorporation to prepare for a Hong Kong IPO as Beijing tightens oversight of red-chip structures, whilst raising fresh funding at $18B valuation (up from $4.3B in December) (here)
SpaceX aims to file for IPO “as soon as this week” - targeting June debut, with plans to allocate over 20% of shares to retail investors (vs typical 10%) & no standard 6-month lockup period given $10B raised privately (here)
Microsoft leased the 900MW data centre site in Texas from startup Crusoe after Oracle & OpenAI abandoned it (here)
Apple plans to open Siri to rival AI assistants beyond ChatGPT in iOS 27, allowing third-party chatbots like Google Gemini & Anthropic Claude to integrate through App Store extensions - potentially boosting services revenue whilst addressing its AI lag (here)
Google launched new Gemini tools allowing users to import chat history from ChatGPT & Claude, providing detailed prompts to transfer context including preferences, interests & instructions - a direct play to steal market share from OpenAI & Anthropic (here)
Big Dogs
OpenAI hit $100M annualised ad revenue just 6 weeks after launching its ChatGPT ads pilot, reaching 600+ advertisers whilst showing ads to under 20% of eligible US users - signalling major monetisation potential ahead of its expected public debut (here)
OpenAI shuttered Sora (video platform), redirecting resources to enterprise tools & robotics (here) & shelved erotic chatbot plans indefinitely amid staff & investor concerns (here)
Musk unveiled Terafab, a $20-25B joint venture between Tesla, SpaceX & xAI to build advanced semiconductors in Texas, targeting 2-nanometer chips for robotics & space applications - driven by Optimus needing 200M+ chips annually if Tesla hits 100M robot production targets (here)
Venture Capital
SoftBank secured a $40B unsecured bridge loan (maturing March 2027) to fund additional OpenAI investments & general corporate purposes, adding to its existing $30B Vision Fund 2 commitment - underscoring Son’s aggressive AI bet amid broader US-Japan tech alignment following the $500B Stargate Project announcement (here)
European Investment Fund plans to raise €15B fund of funds targeting growth-stage ventures, aiming to unlock €80B in scaleup capital across Europe through backing 100 funds with cheques up to €200M each - a sharp increase from €60M average in predecessor programme (here)
Trian Fund Management & General Catalyst raised their Janus Henderson offer to $52/share after Victory Capital withdrew, clearing path for mid-2026 completion (here)
OpenAI investor Vinod Khosla proposed eliminating income tax for Americans earning under $100K by equalising capital gains tax with income tax rates, arguing politicians must address voter fears that AI will displace jobs ahead of the 2028 election cycle (here)
Regulation
A US jury found Meta & YouTube liable for addictive design features that caused mental health harm, ordering $4.2M & $1.8M damages respectively. The landmark verdict validates personal injury claims against social platforms using Big Tobacco-style arguments about product design, potentially exposing tech giants to thousands of similar cases as regulatory momentum builds globally (here)
US federal judge blocked Trump administration from punishing Anthropic after it refused to allow unrestricted military use of its AI, ruling the supply-chain risk designation was ‘arbitrary & capricious’ (here)
US ambassador to EU Andrew Puzder warned Brussels to scale back tech regulation or risk exclusion from the AI economy, saying companies providing critical data centres & hardware won’t stay if over-regulated - comes as EU fined Meta €200M, Apple €500M, Google €2.95B & X €120M in recent months (here)
EFF urges US Supreme Court to hold Cisco accountable for custom-building China’s “Golden Shield” surveillance system that facilitated Falun Gong’s persecution, as justices prepare to hear case on 28 April that could set precedent for US tech companies’ liability when knowingly enabling foreign human rights abuses (here)
Beijing’s review of Meta’s $2B Manus acquisition has shattered the ‘Singapore-washing’ model for Chinese AI startups, with founders now banned from leaving China & VCs reconsidering offshore structures as regulatory uncertainty deepens around tech exports (here)
Sanders & AOC unveiled a bill to pause all new data centre construction across the US until federal AI safeguards protecting workers, consumers & civil rights are enacted - potentially freezing projects for years given Congress is far from passing comprehensive AI legislation (here)
Venture Geopolitics
Elon Musk joined a call between Trump & Indian PM Modi about Iran’s control of the Strait of Hormuz, marking an unusual, but increasingly unsurprising, inclusion of a private citizen in head-of-state diplomacy during wartime crisis. Nb signals Musk’s return to Trump’s inner circle after their summer 2025 fallout (here)
Middle East conflict has severed one-third of global helium supply from Qatar, threatening chip production at TSMC, Samsung & SK Hynix - helium is critical for cooling semiconductors during manufacturing & cannot be easily stockpiled due to storage constraints (here)
Iran conflict triggers global fertilizer crisis as 30% of world supply transits Strait of Hormuz - urea prices up 50%, ammonia up 20% since war began, with India, Thailand & Europe most exposed to shortages that threaten food security worldwide (here)
Iran is deploying sophisticated AI-generated disinformation across social platforms to undermine US-Israeli support & exploit global opposition to military action, with coordination from Russia & China amplifying narratives through state media & bot networks reaching 145M views in 2 weeks (here)
SMIC, China’s largest chipmaker, reportedly supplied chipmaking tools to Iran’s military for ~1 year, according to US officials - potentially violating sanctions if equipment includes US-origin components & deepening US-China tensions amid Middle East conflicts (here)
ECB President Christine Lagarde warns that risks from the Iran war are being underestimated, with energy disruption potentially lasting years rather than months as Gulf supply damage is irreversible, whilst Europe faces limited fiscal space compared to 2022-23 when countries spent 2.5% of GDP cushioning energy costs (here)
Trump & Xi Jinping will meet in Beijing on 14-15 May, postponed from March due to the Iran war, with a reciprocal Washington visit planned later in 2026 - a critical summit for US-China relations amid ongoing geopolitical tensions (here)
China has launched retaliatory trade investigations into US Section 301 probes (US tariff investigations that target allegedly unfair trade practices by foreign countries) as tensions escalate ahead of the planned summit in May (here)
Bipartisan US Senate delegation visited Taiwan to urge the passage of & support for a stalled $40B defence spending bill, aimed at showing support amid rising pressure from China (here)
Trump considers ‘pay-to-play’ NATO model blocking allies spending under 5% GDP from decision-making on expansion, missions & Article 5, after European refusal to send warships to Strait of Hormuz amid Middle East escalation (here)
David Sacks stepped down as Trump’s AI & crypto czar after hitting his 130-day limit as a special government employee, transitioning to co-chair the President’s Council of Advisors on Science & Technology alongside Jensen Huang, Zuckerberg & Ellison (here)
HMRC awarded AWS a £473M contract to migrate from Fujitsu datacenters after Google & IBM dropped out, leaving AWS as the sole bidder - highlighting UK cloud market concentration concerns as the CMA estimates public sector overpays £500M annually (here)
UK ministers exploring break clause in Palantir’s £330M NHS contract as pressure mounts over the US defence contractor’s role in managing health data - only 80 of 205 hospital trusts report benefits from the platform despite whole-life costs exceeding £1B (here)
WeMove Europe has launched a petition demanding European governments halt new contracts with Palantir, citing the US spy-tech company’s role in Gaza operations, ICE deportations & expanding European public sector access - from UK healthcare data to German police systems - warning against surveillance expansion under limited oversight (here)
Strategic Sectors
AI
Mistral released Voxtral TTS, an open-weight text-to-speech model that outperformed ElevenLabs in 70% of voice customisation tests whilst running on smartphones - positioning the French firm as the enterprise alternative to API-dependent voice AI (here)
Stanford researchers found AI chatbots affirm users’ behaviour 49% more than humans, even endorsing harmful actions 47% of the time when giving personal advice - making users more self-centred & less empathetic whilst preferring the sycophantic responses (here)
Wikipedia banned editors from writing or rewriting articles using AI, citing violations of core content policies, though basic copy editing & translation remain permitted with accuracy checks - reflecting broader platform struggles with AI-generated content quality (here)
Notable deals:
Periodic Labs (AI Scientists, founded by former OpenAI & DeepMind execs), is raising hundreds of millions at $7B - up from $1.3B in September after a $300M seed from a16z, Felicis & Accel. The startup builds AI ‘scientists’ that design materials experiments autonomously (here)
Reflection, Nvidia-backed startup positioning as the ‘DeepSeek of the West’, raising $2.5B at $25B to build open-source AI models for US allies - part of Nvidia’s strategy to counter Chinese AI dominance with ‘sovereign AI’ systems running on its chips (here)
Nvidia is investing $2B in Silicon Valley chipmaker Marvell to boost the networking technology that connects its AI chips into ever-larger data centres (here)
AMD-backed Vultr seeking $1B+ funding via Goldman Sachs to compete in AI cloud infrastructure - part of broader funding surge as AI cloud providers like Nscale ($2B), Together AI ($1B target), & CoreWeave ($8.5B debt) race to secure compute capacity (here)
Aligned Data Centers raised $2.6B in debt from institutional investors to build AI computing facilities ahead of its $40B acquisition by a BlackRock & Abu Dhabi MGX consortium, the largest data centre sale to date (here)
Granola (AI meeting notes) raised $125M at $1.5B led by Index, up from $250M 10mo ago, as it pivots from prosumer transcription to enterprise AI workflows with new APIs & team workspaces targeting companies like Vanta, Asana & Mistral (here)
Cybersecurity
Google accelerates quantum computer threat timeline to 2029, warning that current RSA & elliptic curve encryption will be broken by then - 4 years ahead of US government estimates - pushing Android 17 to integrate post-quantum cryptography & urging industry-wide migration to quantum-resistant algorithms (here)
Iran-linked hackers breached FBI Director Kash Patel’s personal Gmail, publishing photos & 300 emails from 2010-2019 as part of an escalating cyber campaign to embarrass US officials during the Israel-Iran conflict (here)
FCC banned new foreign-made consumer routers from US market citing national security risks, after state-sponsored groups like Volt Typhoon & Salt Typhoon exploited router vulnerabilities to target critical infrastructure (here)
Defence
VW is in talks with Rafael Advanced Defence Systems to convert its Osnabrück factory from car production to Iron Dome component manufacturing, potentially saving 2,300 jobs as the German carmaker pivots away from struggling automotive operations amid Chinese competition. Osnabrück is known as the “city of peace” given its role ending the 30yrs war in 1648 (here)
Dassault Aviation is blocking the €100B Future Combat Air System (FCAS) project (the joint Franco-German next gen fighter programme) by refusing to cede design control to German partner Airbus, echoing its 1980s walkaway from Eurofighter. Despite Macron’s diplomatic efforts with Chancellor Merz, family-controlled Dassault maintains its independent streak (here)
Anduril & Palantir are developing software for Trump’s $185B Golden Dome antimissile shield alongside SpaceX, Scale AI, & others, as the space-based defence programme expands to counter ballistic, cruise & hypersonic threats (here)
UK’s Royal Navy forced to borrow German frigate Sachsen for NATO mission after deploying HMS Dragon to defend Cyprus, leaving Britain with only 2 operational destroyers as 3 others undergo repairs - highlighting fleet capacity crisis amid delayed defence spending plans (here)
UK has slipped from 3rd to 14th in NATO defence spending as a share of GDP - rising modestly from 2.1% to 2.3% while most allies quadrupled their contributions since 2014. Poland (4.3%) & Lithuania (4.0%) now rank far higher & Germany has leapfrogged Britain entirely: doubling from 1.2% to 2.4% of GDP & fielding Europe's largest absolute defence budget at €107B. Given Britain's historically larger economy, its fall in the rankings reflects relative stagnation rather than cuts - but that distinction may offer little comfort as allies question whether its privileged alliance positions still reflect its contribution (here)
UK defence tech start-ups are considering US relocation as Britain’s delayed Defence Investment Plan creates funding paralysis, with European firms like Helsing & Quantum Systems also losing patience over contract drought (here)
Notable deals:
Shield AI raised $2B ($1.5B at $12.7B + $500M preferred) led by Advent & JPM to acquire defence simulation company Aechelon, combining AI pilot software with high-fidelity training systems used by Pentagon’s Joint Simulation Environment (here)
PDW raised $110M led by Ondas to scale production of modular military drones including the C100 platform & Attritable Multirotor, emphasising U.S.-based supply chain resilience as battlefield drone demand accelerates (here)
Space
Russia’s Bureau 1440 launched 16 broadband satellites as part of its Rassvet project to build a domestic Starlink rival, marking the transition from experiments to commercial service after 1,000 days of development - a strategic response to Ukraine’s Starlink restrictions that have disrupted Russian front-line communications (here)
NASA has announced a $20B plan to build a permanent Moon base within a decade, while also sending a nuclear-powered spacecraft to Mars by 2028 — driven largely by the race to beat China there (here)
On Wednesday, NASA will attempt to send four astronauts around the Moon on a mission called Artemis II. An article argues the mission may be proceeding under political pressure that risks compromising safety, claiming NASA faces strong expectations from Congress & the U.S. government to demonstrate progress, justify funding & maintain geopolitical leadership over China (here)
Notable deals:
Aetherflux (orbital data centres) raising $250-300M at $2B, led by Index, as Robinhood co-founder Baiju Bhatt’s startup targets Q127 launch for solar-powered satellites performing AI computations (here)
Xona has raised $170M to launch its own network of satellites that will act as a backup - & potential replacement - for GPS, with signals strong enough to resist jamming. The US military is among its target customers (here)
Crypto
Binance faces fresh scrutiny after investigators found $1.7B moved to Iran-linked entities through Blessed Trust, a vendor the exchange continued using despite red flags including shared addresses with blacklisted firms appearing in public records for over a year (here)
UK sanctioned Xinbi Guarantee, a Telegram-based Chinese-language marketplace processing $20B in illicit crypto transactions for money laundering, human trafficking & scam operations, marking escalating Western efforts to disrupt digital crime infrastructure that bypasses traditional financial oversight (here)
Fannie Mae will accept crypto-backed mortgages for the first time, allowing buyers to pledge bitcoin or stablecoins for down payments instead of selling holdings - a move that could mainstream crypto mortgages despite higher borrowing costs (here)
Robotics
Physical Intelligence is reportedly discussing raising $1B at $11B including investment, doubling from its $600M November round at $5.6B led by Alphabet’s CapitalG - reflecting continued AI robotics appetite despite broader funding pullback (here)
EVs
BYD’s annual profits fell nearly 20% to $4.7B as China’s EV price war intensified, marking the first decline in 4 years for the world’s largest EV maker. Domestic market share dropped from 27% to 17% amid fierce local competition, though overseas revenue surged 40% as the company accelerates global expansion with 8 new transport ships & factories across 6 countries (here)