Venture Geopolitics Issue 42
07 March 2026
Matt Miller’s critique - that tech sovereignty risks becoming ‘welfare’ for weak startups - lands because there is a sliver of truth in it. The challenge is that “sovereignty” is an ambiguous objective, interpreted variously as resilience, independence, protectionism or national ambition. In practice, that ambiguity fragments into overlapping mandates that fail to project strategic clarity, creating space for what I’ve previously called “sovereignty-washing”: the tendency to cite existential stakes to excuse weak competitiveness.
But dismissing ‘sovereignty’ outright misses the point.
The backlash to Palantir within the NHS is not happening in a vacuum. Nor are the recurring questions about US security guarantees, or the steady pull of European AI talent into American firms. These are signals of a more fundamental reality: control over technology underpins economic strength and national security. Every major economy now understands this. The difference is how it is framed and sold.
The American system practices economic nationalism with remarkable discipline — but rarely calls it that. “Buy American” is expected. When Jamie Dimon talks about deploying $1 trillion and urges the US to “get stronger”, it is framed as market logic. “American Dynamism” sounds expansive, ambitious, forward-looking. By contrast, “sovereignty” and “strategic autonomy” lack sex appeal — despite describing the same underlying imperative.
The US makes state-aligned priorities feel like the natural product of markets — coherent with venture capital ambition.
European framing often does the inverse, presenting similar priorities as intervention, or worse, protectionism.
The result is a narrative gap that distorts reality. The UK and Europe are capable of building global champions — and increasingly do. But when national ambition is framed defensively, it signals constraint rather than scale, and invites exactly the critique Miller makes.
We increasingly live in a world where the clearest and most confident narratives shape where capital flows, where talent moves and where power concentrates. The answer is not to abandon sovereignty as a concept, but to clarify it. Not as a slogan, but as a coherent expression of national ambition.
IPOs / Publics
Chinese AI & tech companies drove Hong Kong IPO proceeds to $13B in Q1 2026, a 5-year high, with AI stocks Zhipu & MiniMax each up 400%+ after raising $1.3B combined - though mainland markets now compete as regulators tighten quality controls (here)
SpaceX confidentially filed for what could be the largest IPO in history, targeting $75B raised at $1.75T valuation - nearly 20x its 2022 valuation of $90B. The June listing follows Nasdaq rule changes allowing fast-track index inclusion for large IPOs, potentially directing billions in passive investment flows to newly public companies (here). Nb Musk requires SpaceX IPO banks to purchase Grok AI subscriptions to participate (here)
Elmet Group (refractory metals & high-power microwave systems for aerospace/defence) filed for a $115M IPO on Nasdaq, following $202M revenue in 2025 - a rare defence materials float amid supply chain reshoring priorities (here)
KNDS (European land defence) plans dual listing in Frankfurt & Paris in 2026 to support growth after record €11.2B order intake in 2024 & €23.5B backlog (here)
Amazon in talks to acquire Globalstar for $9B to accelerate its Project Kuiper satellite internet service & compete with SpaceX’s dominant Starlink constellation, though Apple’s 20% stake & reserved network capacity complicate negotiations (here)
Microsoft released three AI models (transcription, speech & image generation) as part of Mustafa Suleyman’s effort to reduce reliance on OpenAI, though progress remains mixed with no public general-purpose model yet available despite $600M paid for Inflection’s technology in 2024 (here)
Big Dogs
Anthropic accidentally exposed proprietary Claude Code source code via a packaging error, triggering 8,000+ copyright takedowns on GitHub as competitors gained access to its AI agent techniques & tooling (here)
Anthropic launched Project Glasswing with Claude Mythos Preview, an AI model that autonomously identified thousands of zero-day vulnerabilities across major operating systems & browsers, including a 27-year-old OpenBSD flaw & critical Linux kernel exploits - partnering with AWS, Apple, Microsoft, CrowdStrike & others whilst committing $100M in usage credits plus $4M to open-source foundations (here)
Anthropic cuts off Claude Pro/Max subscriptions (£16-160/mo) from third-party agents like OpenClaw, forcing users to pay-per-use API or extra usage bundles - a margin protection move as unlimited subscriptions subsidised agents costing $1K-5K daily in compute (here)
Anthropic committed to hundreds of billions in Google & Broadcom chip deals, securing nearly 5GW computing capacity as annualised revenue surged from $9B to $30B in 3mo (i.e. Anthropic has passed OpenAI in revenue, despite spending 4x less) (here)
OpenAI acquired TBPN, a Silicon Valley tech talk show averaging 70,000 viewers per episode, for low hundreds of millions - a media play to shape AI narratives despite CEO pledges to avoid ‘side quests’ beyond core ChatGPT business (here)
OpenAI raised $122B at $852B led by SoftBank & a16z, with $3B from retail investors via bank channels, as the company builds its public market narrative ahead of an expected IPO whilst generating $2B monthly revenue (here)
Mistral AI raised $830M in debt from French, British & Japanese banks to expand its Paris data centre to 44MW capacity with 13.8k Nvidia GPUs, part of broader European infrastructure push targeting 200MW by 2027 as demand grows for sovereign AI alternatives to US cloud giants (here)
Venture Capital & Finance
Blue Owl Capital faced $5.4B in redemption requests across two flagship funds (40.7% of its $3B tech fund, 21.9% of its $20B direct lending fund), forcing it to cap withdrawals at 5% as private credit stress spreads beyond peers like KKR, Apollo & BlackRock (here)
Sequoia Capital named Doug Leone as chairman, returning him to active investing after stepping back in 2022, amid ongoing leadership reshuffles that saw Alfred Lin & Pat Grady replace Roelof Botha as co-leaders last year (here)
Matt Miller of Evantic criticised European tech sovereignty efforts as ‘welfare for sub-performing companies’ & argued Europe needs VCs that can compete for the world’s best deals rather than regional champions (here)
Matt Clifford stepped back from daily duties at Entrepreneurs First, the UK accelerator he cofounded 15 years ago that recently reached unicorn status at $1.3B valuation after raising $200M - he’ll remain 1 day per week advising on AI founders & exploring UK tech sovereignty opportunities (here)
EQT & Atomico remain in final selection round to manage the EU’s €5B Scaleup Europe Fund after Eurazeo, Northzone & Vitruvian Partners were eliminated, with decision ‘imminent’ on Europe’s largest strategic tech fund covering spacetech, AI, quantum & biotech (here)
US investors contributed 73% of capital to European AI funding rounds >$100M this year, whilst US tech giants lead recruitment of Europe’s 325,000 AI researchers - raising concerns Europe risks becoming an R&D incubator for Silicon Valley rather than building sovereign tech champions (here)
Jamie Dimon warned that losses in the $1.8T private credit market will be higher than expected when the next credit cycle hits, citing weakening lending standards including aggressive performance assumptions, weaker covenants & more payment-in-kind structures across leveraged lending (here)
New funds:
BC Partners secured €2.2B ($2.5B) first close for Fund XII targeting €5B total, benefiting from LP allocation shifts towards Europe amid US market volatility & focus on managers with strong realisation track records (here)
Mubadala Capital raised $900M for its third Brazil fund (vs $750M target), with Abu Dhabi providing $250M anchor, ‘easing concerns’ the Middle East war will cause Gulf states to review foreign investments (here)
Corazon Capital closed $100M Fund IV targeting AI-native consumer companies, emphasising founders who ‘use AI to amplify human potential, not replace it’ - the Chicago-based firm promoted 3 partners & counts SpotHero, Telnyx & TradingView among portfolio (here)
Regulation
The European Commission announced plans for EU-US dialogue on digital rules amid mounting US pressure, drawing fierce criticism from MEPs who warn this undermines enforcement of the Digital Services Act & Digital Markets Act against American tech giants (here)
Apple removed Jack Dorsey’s decentralised messaging app Bitchat from its China App Store at Beijing’s request for violating regulations on services that could influence public opinion or social movements - highlighting ongoing tensions between Western tech platforms & China’s internet controls (here)
Perplexity faces class-action lawsuit alleging it secretly shares user conversations with Meta & Google via embedded trackers, violating California privacy laws - highlighting data governance risks for AI search platforms as regulatory scrutiny intensifies (here)
Pentagon appeals federal judge’s order pausing Anthropic’s supply chain risk designation, which followed contract talks breakdown over AI safeguards - case highlights tensions between DoD procurement & AI ethics, with implications for defence contractors working with frontier AI companies (here)
Venture Geopolitics
Trans-Atlantic alliance faces potential divorce as Trump threatens NATO withdrawal after European allies refuse to join the U.S.-Israeli war against Iran, adding to tensions over tariffs, Ukraine support cuts & Greenland threats (here)
Germany now requires men aged 17-45 to obtain Bundeswehr permits for trips abroad exceeding 3 mo, part of new military service reforms amid plans to spend €153B (3.5% GDP) on defence by 2029 & build Europe’s strongest conventional army against Russian threats (here)
UK, Italy & Japan signed a £686M contract for the Global Combat Air Programme fighter jet but limited funding to just 3mo whilst Britain finalises its delayed defence investment plan, highlighting how budget constraints can strain international defence partnerships despite strategic imperatives (here)
Iranian missile strikes knocked multiple AWS data centers in Bahrain & Dubai into ‘hard down’ status with no recovery timeline, as the IRGC escalates attacks on Western cloud infrastructure amid broader Middle East conflict disrupting semiconductor supply chains through Strait of Hormuz blockades (here)
UK government courting Anthropic to expand London operations after the AI company’s clash with US defence department over military use restrictions, with proposals ranging from office expansion to potential dual listing ahead of expected IPO (here)
JPMorgan CEO Jamie Dimon outlined plans to deploy over $1T through security & economic initiatives & urges US to ‘Get Stronger’ & keep military & economic power. JPM also launched the American Dream Initiative to expand small business lending by $80B over 10 years & grow clients from 7M to 10M, hiring 1,000 bankers whilst advocating for local economic policies - part of Dimon’s broader push to address what he calls America’s ‘fraying’ economic opportunity (here)
Microsoft committed $10B over 4 years to build AI infrastructure & cybersecurity capabilities in Japan, partnering with SoftBank & Sakura Internet on domestic LLM development whilst training 1M engineers by 2030 - part of broader Asian expansion following $5.5B Singapore & $1B Thailand commitments (here)
NHS staff increasingly refuse to work on Palantir’s £330M Federated Data Platform over ethical concerns about the US company’s defence work & CEO’s Trump support, with some treating it as workplace adjustment; 123 of 205 hospital trusts now using the system despite internal resistance & government review of contract break clause (here)
The UK now has at least five government bodies investing in AI startups (including the new Sovereign AI fund, Innovate UK, British Business Bank, National Wealth Fund & ARIA) plus multiple regulatory agencies, arguably creating complexity for founders navigating support options (here)
US scientists are departing for Europe & other regions as Trump slashes research funding, with Austria recruiting a robotics engineer from Cambridge who hired 4 more US researchers; Canada launched a $1.2B talent recruitment program whilst the EU allocated €500M as rivals capitalise on 95,000 federal science departures (here)
US International Development Finance Corporation secured rare earths access through $565M loan to Brazil’s Serra Verde mining company, including offtake controls ensuring metals go to US & allies rather than China - part of broader American strategy to break Chinese dominance in critical materials supply chains (here)
Strategic Sectors
AI
Netflix released VOID, an open-source video model that removes objects from scenes & realistically animates how remaining objects behave - turning car crashes into open roads or removing pool splashers whilst keeping water undisturbed. In user testing, VOID outperformed rivals like Runway 64.8% to 18.4% (here)
Poolside’s ambitious 2-gigawatt Texas data centre project collapsed after CoreWeave deal fell through & $2B funding round anchored by Nvidia stalled, forcing the AI start-up to seek new cloud partners including Google whilst splitting into separate infrastructure & model-building entities (here)
Per The New Yorker, new interviews & documents reveal OpenAI board members, led by chief scientist Ilya Sutskever, compiled 70 pages of evidence alleging Sam Altman exhibited ‘a consistent pattern of lying’ & deception before his November 2023 firing, raising questions about whether someone building ‘civilization-altering technology’ can be trusted with humanity’s future (here)
Notable deal:
Fractile (UK AI chip start-up), is seeking >$200M at ~$1B to challenge Nvidia’s inference dominance, with backing from Accel & Oxford Science Enterprises - part of broader investor appetite for British inference-focused chip companies after rival Olix raised $220M at similar valuation (here)
Cybersecurity
North Korean hackers compromised Axios, a JavaScript library downloaded tens of millions of times weekly, by hijacking a maintainer’s account & pushing malicious code that delivered remote access trojans - highlighting ongoing supply chain vulnerabilities in critical open source infrastructure (here)
Mercor ($10B AI recruiting firm) suffered major data breach via supply chain attack on open-source LiteLLM project, with Lapsus$ claiming theft of internal Slack communications, ticketing data & platform interaction videos - highlighting critical infrastructure vulnerabilities in AI toolchain dependencies (here)
Cryptography engineer Filippo Valsorda cites new Google & Oratomic papers showing dramatically reduced qubit requirements for breaking 256-bit elliptic curves - prompting urgent calls to deploy post-quantum cryptography now with ML-KEM & ML-DSA rather than wait for better solutions (here). Cloudflare is accordingly accelerating timelines (here)
Russian military hackers from APT28 (GRU Unit 26165) exploited vulnerabilities in UK routers from TP-Link & MikroTik to hijack DNS traffic, redirecting users to malicious sites for credential theft - highlighting infrastructure vulnerabilities amid growing US-China router security concerns (here)
Defence
UK delayed its Defence Readiness Bill until mid-2027 - legislation to prepare critical infrastructure & industries for war - whilst European neighbours rapidly bolster military readiness with Germany introducing voluntary service, France adding €8.5B for drones/missiles, & Poland fortifying its Russian border (here)
Former RAF air defence commander warns UK has ‘extremely limited capability’ against ballistic missiles, with £1B funding allocation insufficient compared to Germany’s €6B commitment & Denmark’s $9B overhaul - critics question reliance on allies to intercept missiles targeting Britain (here)
Royal Navy First Sea Lord Gen Sir Gwyn Jenkins admitted the Navy is not ready for war, saying ‘we have work to do’ - the most senior military figure to criticise Armed Forces readiness amid pressure on Starmer to boost defence spending to 3% GDP & US criticism over Iran crisis response (here)
Trump’s 2027 budget requests $1.5T for defence - a 40% increase & highest in modern history - offset by $73B cuts to domestic programmes as the Iran war enters its 5th week, with bipartisan congressional pushback already emerging (here)
Honeywell Aerospace partnered with startup Odys Aviation to develop the Laila hybrid-electric aircraft for Pentagon counter-drone missions, bringing a $17B defence contractor into the nascent eVTOL military market as Trump requests $1.5T defence spending (42% increase). The autonomous aircraft uses AI-driven systems & multiple methods (lasers, microwaves, interceptor drones) to disable enemy drone swarms before they reach targets (here)
Notable deals:
Saronic (autonomous ships) raised $1.75B led by Kleiner Perkins at $9.25B, more than doubling its valuation from $4B last year as the US races to counter China’s shipbuilding dominance & modernise military capabilities under Trump’s defence agenda (here)
Hermeus raised $350M ($200M equity, $150M debt) at $1B valuation to develop unmanned hypersonic aircraft, pivoting from in-house engine development to partnering with Pratt & Whitney on modified F100 engines to accelerate testing & government contracts (here)
Space
Artemis II crew set new human distance record at 252,752 miles from Earth, breaking Apollo 13’s 1970 mark during their lunar flyby mission - the first crewed Moon voyage since 1972, featuring the first Black astronaut & first woman to travel to the Moon (here)
Energy
Notable deal:
Palmar Luckey backed Valar Atomics raised $450M ($340M equity, $110M debt) at $2B valuation to build small modular reactors for AI data centres, backed by Palmer Luckey & Shyam Sankar with defence tech investors including Lockheed Martin board member John Donovan (here)
Digital Assets / Crypto
Tether seeks to raise up to $20B at $500B despite $10B+ net profits in 2025, targeting expansion beyond its $184B USDT stablecoin dominance into AI, commodity trading & media - but investor concerns mount over extreme valuation (exceeding all US banks bar JPMorgan) & lack of exit route given no IPO plans (here)
Notable deal:
Midas (Berlin tokenised assets platform) raised $50M led by RRE & Creandum, having minted $1.7B in assets with $500M TVL across DeFi integrations; launched $40M liquidity layer enabling instant redemptions without settlement risk (here)
EVs
Tesla delivered 358,023 vehicles in Q1, up 6% year-on-year but below 365,000 analyst forecasts, whilst Chinese rival BYD’s EV sales plunged 25% amid intensifying competition - Tesla Europe sales rebounded 12% in February driven by cheaper Model Y/3 variants & cash discounts (here)