Venture Geopolitics Issue 61
18 August 2026
There have been a lot of headlines about the military and defence over the past week or so. The FT shared how EU defence execs are no longer as safe as they were. IISS wrote about an emerging intelligence “gig economy” in which hostile states recruit disposable local operatives for surveillance and sabotage. Russia warned the UK of ‘consequences’ over Ukraine’s use of British-made drones. And defence tech Kraken, which is backed by all of the NATO Innovation Fund, the National Security Strategic Investment Fund and the BBB, and should be one of the most impregnable UK companies, revealed a case of supply chain poisoning. Cameras installed on their unmanned boats were found to be sending “heartbeat” communications to an IP address in China.
It is a reminder we live (or have been living) in a globalised world, and war is closer to our doorstep than we might want to admit. Supply chains are going to be tightening in the military industrial complex and anything government-related should expect a lot more scrutiny.
Trump has already made strong moves to isolate the US from the rest of the world and is succeeding in pushing the rest of the world to bring their supply chains home, too. This week, he put tariffs of up to 100% to imported drones and components - though Britain gets a preferred 10% rate (for now at least!)
IPOs / Publics
Anthropic investors expect the AI start-up to float at a valuation of $2T or more in October (here)
Shein is targeting a $25B valuation in its Hong Kong IPO - a 75% markdown from its $98B 2022 valuation - after revenue growth collapsed to 8% in 2025 & 1.1% in Q1 2026, as US tariffs (imposed from May 2025) & EU restrictions on Chinese e-commerce bite (here)
Nvidia unveiled partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs & KKR to mobilise $500B+ in third-party capital for AI infrastructure (here)
ECB economists warn a US tech stock correction is likely & poses a financial stability risk to Europe, where households hold €440B exposure to US tech equities via funds. They argue that even if AI succeeds, rising economy-wide uncertainty (not diversifiable like firm-level risk) will push up required returns & depress valuations - echoing boom-bust patterns in railways, electricity, & dotcom eras (here)
Stripe acquired OpenRouter (AI model routing) for over $7B in cash & stock, 5x the $1.3B valuation from months earlier, reflecting demand for cost optimisation as developers mix cheaper & frontier models. OpenRouter was generating $50M ARR as of April, up 5x from October (here)
Alphabet, Meta, Microsoft & Amazon have committed ~$3T more to AI infrastructure than balance sheets show - $1.5T in purchase commitments (chips, power) & $904B in leases not yet started (data centres) sit off-balance-sheet, dwarfing the $604B in on-sheet liabilities & debt. Alphabet leads purchase commitments at $811B, while Meta tops unleased capacity at $347B (here)
Big Dogs
Anthropic’s new text watermarking for Claude - mandated by EU regulation - works by probabilistically biasing word choices at inference time, not by adding invisible characters. Critics note honest users face degraded output quality whilst bad actors can trivially bypass detection via paraphrasing tools, & that the watermark calls every word choice into question for purposes unrelated to user needs (here)
Anthropic is projecting $190-200B revenue in 2028 - vs. a $47B run rate in May - as it prepares for IPO, with bankers using 2-year-ahead revenue multiples to value the company despite heavy spending on AI infrastructure (here)
OpenAI replaced Chief Revenue Officer Denise Dresser (8 mo tenure) with Dali Rajic, a Wiz executive who oversaw annualized revenue growth from $200M to nearly $2B. The hire from cybersecurity rather than traditional enterprise software (Oracle, Salesforce) signals OpenAI’s push to monetise security products after disclosing its models broke containment during testing & hacked other companies (here)
OpenAI launched Computer History for ChatGPT on macOS, an opt-in feature that tracks user interactions across apps & websites to build a searchable timeline & suggest workflow automations. Unlike the earlier Chronicle preview, it uses accessibility APIs rather than screenshots, stores data locally, & is off by default. Initially unavailable in EEA, Switzerland & UK; limited to Pro, Business & Enterprise tiers (here)
Venture Capital
Craft Ventures is raising ~$1B, its first fund since David Sacks left his White House AI & crypto czar role earlier this year; the firm is consolidating from two vehicles into one Series A+ fund, bringing total AUM above $4B (here)
Robinhood launched its second venture fund, raising $226M in a NYSE IPO to let retail investors buy into early-stage startups from Y Combinator’s portfolio (5,000+ companies at $1.3T+ combined valuation, including Coinbase, Reddit & OpenAI). The move extends Robinhood’s retail democratisation thesis into private markets as startups stay private longer; the firm is already planning funds three through six (here)
GALLOS Technologies (UK defence venture studio led by former GCHQ director Sir Jeremy Fleming & ex-special forces personnel) raised £35M co-led by Ventura Capital & Aberdeen Investments to build & scale early-stage defence startups addressing digital threats, following investments in StirlingX & AI Score (here)
Venture Geopolitics
30-year US Treasury yields hit 5.34% (highest since 2007) amid inflation fears from oil above $90, fiscal deficit concerns, & record Big Tech AI bond issuance expected to reach $1.9T in 2026 - crowding out government debt & forcing higher term premiums across developed markets (here)
UK government urgently assessing economic & security impact of losing access to frontier AI models after Trump blocked foreign access to Anthropic’s Fable 5 in June (later reversed). Cabinet Office estimates even weeks of delay in accessing new models could hit UK competitiveness, whilst asymmetric cyber exposure risks emerge if foreign actors exploit vulnerabilities before British firms can patch. UK investing £1.1B in AI hardware & £500M in sovereign AI fund to reduce dependency on US hyperscalers (here)
Five Eyes intelligence alliance issued a rare public warning on AI-enabled bioweapons risk, urging governments to act before synthetic biology & machine learning converge to lower barriers to germ warfare - a signal of growing Western concern over dual-use technology governance (here)
Trump Media disclosed 10+ paying customers for its real-time Truth Social feed, mostly high-frequency trading firms paying $60K-$100K/mo for millisecond-faster access to Trump’s market-moving posts during the Iran conflict, while the company reported $238M losses on $1.7M revenue & unwound deals with Crypto.com (here)
Strategic Sectors
AI
CME Group will launch compute futures contracts (5 Oct, pending approval) tied to Nvidia H100 & Blackwell B200 GPU rental costs, creating the first tradable benchmark for AI computing capacity! (here)
Z.ai released open-source GLM-5.3, claiming cybersecurity performance on par with Anthropic’s Mythos 5 - part of a broader push by Chinese developers (Moonshot, Z.ai) to challenge US frontier models with capable open-source alternatives (here)
DeepSeek raised V4-Pro API pricing to $3.96/M tokens (peak) from $0.87, effective 16th August, following mixed early reviews of the flagship model; V4-Flash rises to $1.32 (peak) from $0.28, though both remain well below Anthropic’s Claude Opus 5 ($25) & Moonshot’s Kimi K3 ($15) (here)
SpaceX completed its $60B all-stock acquisition of Cursor, finalising an option agreed in April that gave Cursor access to SpaceX’s AI compute for training its Composer coding model in exchange for tools & data (here)
The UK government awarded KPMG & EY up to £456M (2026-28) to train civil servants in AI skills, the largest Big Four contract since 2012, despite Labour’s 2024 pledge to halve consultancy spending (actual reduction: 14% in FY25). The deal serves as a stopgap before a planned in-house training model (here)
Notable deals:
Lovable (AI-powered software creation platform) raised $400M at $13.3B, led by Menlo Ventures & co-led by EQT’s Scaleup Europe Fund (here)
Wispr (AI dictation) raised $280M at $2B led by Menlo Ventures, expanding into meeting notes & launching Canto (a new speech model cutting error rates from 30% to <10%) as competition intensifies from Willow, Monologue & others (here)
Energy
Nvidia is in talks to invest up to $3B in SB Energy (SoftBank-backed data centre developer) as part of discussions to provide ~$100B in credit support for OpenAI’s planned 10 GW Ohio campus (here)
Small modular reactor stocks (NuScale, Nano Nuclear, Oklo, X-energy) have lost $30B in market cap since October, with short sellers earning $2.1B as the sector deflated from hype-driven peaks (here)
Notable deal:
Form Energy raised $750M led by T. Rowe Price to expand iron-air battery manufacturing in West Virginia, with 80 gigawatt-hours of customer commitments (up 4x since early 2026) including Google’s 30 GWh Minnesota data centre project. The 100-hour discharge batteries use 80% US-sourced materials & no Chinese inputs (here)
Defence
Trump declared 100% tariffs on drones over 25kg, thermal-camera drones & all aircraft parts, citing national security concerns over foreign supply chains (25% on smaller drones). Companies manufacturing in the US are exempt; allies face 10-15% rates (here)
Russia threatened the UK with “consequences” after reports that British-made drones were used in Ukrainian long-range strikes, calling London’s support for Kyiv an “escalation”. The UK MoD reaffirmed it stands “shoulder to shoulder” with Ukraine. The warning follows a series of aggressive encounters this year, including Russian warships firing warning shots in the English Channel, live-fire exercises near Plymouth, & submarine operations near critical UK undersea infrastructure (here)
Royal Navy K3 Scout drones supplied by Kraken Technology Group contained third-party Chinese-made cameras that sent telemetry to China, exposing the tension between Britain’s push for cheaper, faster military technology & supply-chain sovereignty. MoD found no evidence of compromised data but disabled internet connectivity; even basic metadata (device status, geolocation inference) can reveal operational patterns when aggregated (here)
Russian intelligence services have been caught surveilling European defence CEOs, including recent incidents near Saab’s Johansson in Sweden & earlier assassination plots against Rheinmetall’s Papperger & drone-maker Donaustahl’s Thumann. The pattern recalls 1970s-80s Red Army Faction killings of German business leaders, but now aims to intimidate executives away from Ukraine-linked production - a tactic that could spread to other hostile states targeting strategic sectors (here)
Putin threatened to seize British vessels in retaliation for UK & EU operations against Russia’s shadow fleet, describing ship seizures as “piracy” & warning of responses “wherever we deem it necessary” (here)
Russia & Iran are rapidly scaling online recruitment of amateur proxies - from teenagers to criminal gangs - to carry out surveillance, arson & assassinations across Europe, exploiting a permissive online environment & strain on finite law-enforcement resources (here)
Australia unveiled a 10-year defence technology strategy prioritising AI, autonomous systems, quantum, hypersonics, high-energy lasers & undersea warfare, with AU$425B committed over the decade (here)
Notable deal:
Cambridge Aerospace raised $300m to develop its missile & drone interceptor systems from Accel, DFJ Growth, Elad Gil & Co, Lakestar, Lux Capital, Never Lift Ventures, Ora Global (here)
Space
Goldman Sachs argues space is shifting from a government-led prestige project to a pillar of the industrial economy, as launch costs have plummeted & private capital now funds infrastructure once exclusive to states - creating a new arena for geopolitical competition over orbital access, launch capacity & space-based services (here)