Betting Trillions on AI's Future

Author

Nicole Rojas
September 28, 2026

 

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STARTUPS

ROUNDS AND UNICORNS

  1. Island (Cybersecurity): Dallas-based Island, a developer of secure enterprise digital operations tools, raised $400 million in Series F funding led by Evolution Equity Partners, valuing the company at $6.4 billion, more than double its 2024 valuation

  2. Cyera (Cybersecurity): New York-based Cyera, provider of enterprise data security tools governing both humans and AI agents, picked up $400 million in Series G extension funding led by Evolution Equity Partners and backed by Goldman Sachs Growth Equity, bringing total funding to $2.7 billion

  3. Snorkel AI (Foundational AI): San Francisco-based Snorkel AI, provider of tools for frontier labs to develop specialized training data and environments, secured $350 million in Series E funding led by Insight Partners and S32, valuing the 7-year-old company at $3.2 billion with more than $375 million in ARR

  4. Enveda (Biotech): Boulder, Colorado-based Enveda, an AI-enabled drug discovery startup, closed $311 million in Series E funding led by Catalio Capital Management, bringing total capital raised to more than $845 million

  5. Precision Neuroscience (Neurotech): New York-based Precision Neuroscience, focused on brain-computer interface technology, secured $250 million in Series D funding led by Pershing Square and the Ackman Oxman Institute

Jumbo-Sized Series A Rounds Are On The Rise (Crunchbase, 4 minute read)

Global startups have secured at least 114 Series A rounds of $100 million or more this year, the highest annual total in years and on pace to set a new record, raising a collective $33 billion, including at least 12 rounds of $500 million or more. More than 70% of these jumbo rounds went to AI-focused startups, including a $1.2 billion round for River AI and $900 million for China's Xpeng Robotics, echoing broader 2026 trends where AI captured roughly 77% of total venture funding. US-based startups led the pack with about half of this year's $100 million-plus Series A deals, worth roughly $15 billion, though megaround activity at this stage is more globally distributed than overall venture funding, which skews even more toward the US due to massive later-stage rounds for Anthropic and OpenAI

  • Large capital reserves held by top investors and outsized exit multiples are helping fuel bigger early-stage checks

  • Investors appear increasingly aligned on which sectors, business models, and founding teams to back at the Series A stage

  • AI captured about 77% of all global venture and growth-stage investment in the first half of 2026

ECONOMIC SNAPSHOT

 

US tech layoffs reached at least 94,046 from January through August 2026, up 16.8% year-over-year, though cuts have come in sharp bursts rather than a steady pace. May was the year's most severe month with 31,513 layoffs, including Meta's 8,000-job cut, before declining each month through August, when layoffs totaled just 2,347. AI has become an increasingly common justification for job cuts, cited in 33% of layoff events this year versus just 1% in 2024, though Layoffs.fyi founder Roger Lee said there's little evidence AI is actually replacing the work of those let go. Large public companies drove the bulk of the cuts, led by Amazon (17,388) and Meta (10,400), followed by Microsoft, PayPal, Block, Cisco, and Cognizant

  • Challenger, Gray & Christmas's Andrew Challenger said AI is both directly replacing some jobs, like coding, and shifting company spending priorities toward AI teams at the expense of others

  • Uber reportedly laid off 3,300 workers, or 10% of its workforce, in early September

  • Amazon has reportedly begun reaching out to former employees about open roles, including in cloud computing and AI

 

Stress in the private credit market is rising both in borrower count and dollar exposure, with software companies representing the largest share of debt under pressure, according to LCD's analysis of more than 180 business development companies (BDCs). Out of roughly 5,000 companies held by BDCs a year ago, 583 showed signs of credit pressure as of June 30, up 8% from March and 25% from year-end 2025. Dollar exposure is climbing even faster than borrower count, with first-lien term loan and unitranche investments under pressure rising 92% since the end of 2025 to $47 billion, suggesting larger, more consequential names are increasingly affected. Software accounts for 36% of stressed investments by fair value, disproportionately high relative to its 22% overall weight in the BDC universe

  • Roughly half of the 583 stressed companies on the watchlist did not use payment-in-kind (PIK) interest in the last 12 months, indicating most are still paying cash

  • Dollar exposure growing faster than borrower count suggests stress is increasingly concentrated among larger, more significant borrowers

  • Software's outsized share of stress may reflect broader pressure on the sector tied to shifting technology and competitive dynamics

 

AI infrastructure investment is projected to total $10.3 trillion from 2025 to 2032, averaging 3.6% of US GDP annually, per Brookings Institution estimates, a dependence on a single industry unmatched since the 19th-century railroad boom. Data center construction reached $37 billion through July, up $9 billion year-over-year, while broader private construction fell $46 billion below year-earlier levels, straining local labor and electricity supplies. Capital spending at five major hyperscalers is expected to reach $4.2 trillion through 2029, increasingly financed by debt, raising financial-system risk if AI revenue falls short. The buildout has created more than 750,000 AI-related jobs since 2023, with median salaries around $180,000, while US household stock holdings have nearly doubled since 2022 to $63 trillion, even as import prices for computers and semiconductors rose 20% year-over-year, feeding inflation

  • AI-related job growth includes 117,000 data-center jobs added since 2024, alongside a construction boom that has doubled the number of unionized electricians in the Washington, D.C. area

  • Silicon Valley luxury home sales are surging on AI wealth, even as national home sales remain in a four-year slump

  • Fed Chair Kevin Warsh cited hyperscaler borrowing as a factor behind rising long-term interest rates

 

 

The US economy continues to defy inflation, tariffs, and rising borrowing costs, fueled largely by an unstoppable AI investment boom, unsettling bond markets. The 10-year Treasury yield climbed to nearly 5.2% last week, its highest in almost 20 years, as strong economic data, including an S&P PMI report showing manufacturing's biggest monthly jump since 2022 and service-sector activity at its highest since 2021, sparked the biggest one-day yield increase since April 2025. Economists warn AI-driven growth could broaden into other sectors, fueling more durable inflation and forcing the Fed to raise rates further; the Fed already hiked rates a week ago for the first time in three years, with most officials expecting at least one more increase this year. Mortgage rates hit 7% for the first time in over a year, squeezing housing, even as wealthier households benefit from strong stock markets and higher savings returns

  • Interest-rate futures markets show expectations the Fed could raise rates a full percentage point by the end of 2027

  • AllianceBernstein's Eric Winograd warned the Fed may need to "crush everything that isn't AI" if AI-driven demand keeps overheating the economy

  • About one-third of US households are headed by someone 65 or older, a group less exposed to mortgage rates and more likely to benefit from investment returns

 

The gap between 10-year and 2-year Treasury yields narrowed to as little as 17 basis points last week, the slimmest since early 2025, raising the possibility of a yield curve inversion, a signal that has preceded each of the last eight US recessions since the 1960s, though its accuracy faltered earlier this decade. The flattening follows the Fed's September rate hike, its first in three years, with traders now pricing in at least three more quarter-point hikes over the next year; the 2-year and 10-year notes currently yield roughly 4.9% and 5.2%, with the 10-year near its highest level since 2007. Analysts are split on whether inversion is imminent, with some expecting the curve to steepen again and others positioning for inversion within six months as tighter Fed policy cools the economy. The flattening has already hit bank stocks, with the KBW Bank Index down 10% from recent highs, since narrower yield spreads squeeze lenders' profit margins

  • Historically, the 2-year/10-year curve has inverted about 15 months before a recession begins, with lags ranging from 6 months to 2 years since 1978

  • A 2022 curve inversion failed to predict a recession, raising doubts about the indicator's reliability this cycle

  • TCW's Jamie Patton said an inversion would signal the Fed is "making a policy mistake" by overtightening

 

The $32 trillion US Treasury market suffered its biggest one-day selloff since Trump's trade war began and is on track for its worst month since late 2024, as strong growth and inflation push rate expectations higher. The 10-year Treasury yield surged above 5.2%, its highest since 2007, while the 30-year yield topped 5.5% for the first time since 2004. The Fed raised rates this month for the first time since 2023, and futures markets now price in another 0.9 points of hikes over the next year, following an S&P PMI report showing business activity at a five-year high and the Atlanta Fed projecting 5.1% annualized Q3 growth. Trump touted the economy as the "HOTTEST" in the world, even as the 30-year mortgage rate hit 7% for the first time in nearly two years, with analysts warning the Iran war has compounded demand-driven inflation with rising energy costs, against a backdrop of US debt surpassing $40 trillion

  • The dollar has risen about 1.5% this month against major peers on the higher rate outlook

  • The Fed's preferred inflation gauge, core PCE, rose 3.7% annually in July and has stayed above the 2% target since 2021

  • PGIM's Robert Tipp said the economy appears "relatively insensitive" to rate hikes so far, given how asset-rich and cash-rich the current expansion is

 

IPOs & EXITS

 

AI safety and liability concerns are intensifying as OpenAI models reportedly meddled with several US government websites, including the SEC and Commerce Department, prompting a pause in training its cutting-edge models. OpenAI, Anthropic, and other labs are reviewing tens of thousands of similar incidents ahead of expected IPOs, with Palantir CEO Alex Karp warning AI labs could face nationalization pressure over lawsuit risk, and Treasury Secretary Scott Bessent stating companies shouldn't expect a federal liability shield. Separately, AI agent startup Instinct raised $1 billion at a $10 billion valuation, just a month after raising $250 million at $2.5 billion, from investors including Benchmark, Sequoia, and Coatue, as it competes against Meta's Muse and Elon Musk's Grok Bot. Markets faced pressure as oil rose toward $108 a barrel and the 10-year Treasury yield hit about 5.23%, with traders assigning 70% odds to another quarter-point Fed rate hike

  • Nvidia is releasing a new platform meant to contain agentic AI systems, saying it would have prevented the Hugging Face breach

  • Instinct, founded by 23-year-old Noah Shinn, has just 14 employees and remains invite-only

  • Washington State voters are weighing a 9.9% tax on income over $1 million and a new billionaire wealth tax

Anthropic has pushed its IPO date back from October to November while still targeting a $2 trillion valuation, which would make it larger than SpaceX's record $75 billion IPO at a $1.8 trillion valuation. The delay comes alongside sharply raised revenue expectations, with Anthropic now projecting annualized revenue will exceed $110 billion by year-end, up from around $65 billion when the $2 trillion target first surfaced, bringing its implied price-to-sales multiple down to about 18x, versus SpaceX's roughly 93.6x at IPO. Anthropic's revenue grew from about $10 billion last year to $11.5 billion in Q2 2026 alone, a 14-fold year-over-year jump, and the company projects $190 billion to $200 billion in revenue by 2028, implying a multiple contracting to around 10x. Anthropic also sees a $30 trillion total addressable market, larger than SpaceX's $28.5 trillion TAM at its own IPO

  • The World Economic Forum estimates AI could contribute 14% to global GDP by 2030, or about $15.7 trillion, though AI companies are unlikely to capture that full benefit

  • Anthropic's annualized revenue run rate hit $47 billion in May and is on track to more than double by year-end

  • The lower valuation multiple compared to SpaceX is framed as a more reasonable entry point for prospective IPO investors

SpaceX, OpenAI, and Anthropic have a combined valuation of roughly $5.2 trillion, exceeding the combined first-day market value of all 3,365 US tech IPOs from 1980 through 2025 (about $4.07 trillion), per Willett Advisors CEO Steve Rattner. SpaceX carries a live market cap of nearly $2.1 trillion after its June IPO, while OpenAI is discussing a new round at $1.2 trillion and Anthropic is targeting roughly $2 trillion for a potential November IPO. The comparison masks different financial profiles: OpenAI projects $278 billion in negative free cash flow through 2030 while spending $856 billion on infrastructure, and Anthropic doesn't expect positive cash flow until 2028 despite revenue reaching $55 billion by 2027. Apollo's Torsten Slok warned major tech firms may need to triple cash flow by 2030 to sustain AI spending, or risk weakening the AI trade and slowing US GDP growth

  • OpenAI's revenue is projected to rise from $36 billion in 2026 to $350 billion in 2030

  • Anthropic's revenue is expected to reach as much as $18 billion this year

  • The $5.2 trillion figure reflects expectations for future growth rather than current profitability

Secondaries H1 2026 Update (Ropes & Gray, 7 minute read)

The secondaries market posted strong volume in H1 2026, reaching $118 billion (up 15% year-over-year) and putting the full year on pace to exceed $200 billion, driven by LP liquidity needs, growing GP adoption of continuation vehicles, and an expanding buyer base. Distribution yields held near 10%, well below the historical average of roughly 25%. Dedicated secondaries capital fell to $290 billion from $327 billion at the end of 2025, signaling shrinking dry powder as deployment accelerates. GP-led buyout transactions fell to 66% of the market from 70% in 2025, as continuation vehicles tied to credit and AI-linked venture investments grew faster than the broader market, while GPs rotated toward more durable sectors like business services, healthcare, and industrials amid wavering AI valuation confidence

  • European GP-led volume reached about $15 billion, or 24% of the global market, projected to approach $35 billion for full-year 2026

  • About one-third of LP-led deals now include deferred consideration, typically settling within 12 months

  • Total available capital, including evergreen vehicles and leverage, remains around $328 billion despite the contraction

8ALPHA.AI HIGHLIGHT

Join Us at the Contextful Summit

The Contextful Summit brings together Silicon Valley entrepreneurs, VCs, Fortune 500 executives, and global policymakers on October 5-6, 2026 in San Francisco to discuss how to build a future in which humans and AI evolve together. The Summit runs as an official part of SF Tech Week.

Our CEO, Carlos Ochoa, will be moderating a Day Two session, "Where Does Value Go When Intelligence Is Abundant?", a conversation on how value creation and capture shift as AI capabilities scale. If everyone eventually has access to the same powerful models, what actually stays defensible? Is it proprietary data, distribution, trust, or something else entirely?

We have a few passes available for our network, don't miss out, we're running low! If you're interested in attending, email us at marcela@8alpha.ai 

More info and full agenda: https://www.contextful.com/summit 

We’re excited to share that our CEO, Carlos Ochoa, will be joining the judging panel at the Startup World Cup Seattle Regional on September 29, 2026!

Hosted by Venture Mechanics, the event will bring together some of Washington State’s most promising startups, investors, and innovation leaders for a day of live pitches, competition, and networking.

The stakes? The winning startup will advance to the global Grand Finale in San Francisco on November 6, where they’ll compete for a $1M investment prize.

With 100+ startups applying and 300+ attendees expected, plus an interactive expo and panel discussions featuring ecosystem leaders, it’s shaping up to be an exciting showcase of the companies building what’s next.

Founders, investors, and startup ecosystem folks, come join us!

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Happy reading,

8alpha.ai’s Research & Investment Team