The AI Showdown

Author

Nicole Rojas
March 02, 2026

Week of March 2nd, 2026

Welcome to AlphaInsights, 8alpha.ai’s weekly newsletter, your ultimate source for curated insights and key updates from the dynamic world of venture capital!

From billion-dollar rounds to market-defining shifts, we deliver the intelligence powering the global investment landscape, moving investors and innovators forward. At 8alpha.ai, we’re not waiting for the future of capital, we’re building it. Stay sharp, stay curious, and stay ahead.

STARTUPS

ROUNDS AND UNICORNS

  1. OpenAI ($110B, artificial intelligence): Best known for ChatGPT and its frontier large language models, the San Francisco-based AI leader raised $110 billion at a $730 billion pre-money ($840 billion post-money) valuation, including $50B from Amazon, $30B from SoftBank and $30B from Nvidia, with more investors expected to participate

  2. MatX ($500M, semiconductors): MatX, which builds custom AI chips and hardware architectures designed to power large-scale language models, secured $500 million in Series B funding led by Jane Street Capital and Situational Awareness to ramp up manufacturing

  3. Vero Networks ($500M, broadband): Fiber broadband operator Vero Networks raised $500 million in growth capital from Braemont Capital, Hamilton Lane and Delta-v Capital to expand its infrastructure footprint across U.S. markets

  4. Shine Technologies ($240M, fusion): Developer of fusion-based solutions for medical isotope production and future clean energy systems, Shine Technologies brought in $240 million in equity funding led by NantWorks

  5. Revel ($150M, hardware testing tools): Revel, a Los Angeles startup offering software to manage and automate hardware testing and control systems, closed a $150 million Series B led by Index Ventures to grow its presence in aerospace, defense, robotics and industrial sectors

OpenAI Raises $110 Billion as It Races Toward IPO (The Wall Street Journal, 4 minute read)

OpenAI has secured $110 billion in new funding, valuing the company at $730 billion pre-money, underscoring strong investor demand ahead of a potential IPO later this year. The round includes $30B from SoftBank, $50B from Amazon (with $15B upfront and $35B tied to milestones), and $30B from Nvidia, with additional investors expected to join. As part of the Amazon deal, OpenAI will purchase billions of dollars’ worth of Amazon’s Trainium AI chips for its new enterprise platform, Frontier

  • The raise comes amid rapid product growth and intensifying competition

  • Weekly users of OpenAI’s coding tool Codex reached 1.6 million, more than tripling this year, with usage up 37% in the past week alone

  • The company is targeting a potential Q4 IPO, as rival Anthropic recently raised $30B at a $380B valuation, intensifying the race among leading AI firms

ECONOMIC SNAPSHOT

Trump Faces 2,000 Tariff Lawsuits Following Supreme Court Loss (Bloomberg via Yahoo Finance, 4 minute read)

After the US Supreme Court ruled most of President Trump’s global tariffs illegal, more than 100 new lawsuits were filed, bringing total tariff cases to over 2,000, as companies seek refunds on more than $170 billion in tariffs collected over the past 10 months. Major firms including FedEx, Dyson, Dollar General, L’Oreal units, Skechers and On Holding have joined mostly smaller businesses in suing, amid concerns the administration may resist or delay repayments

  • The dispute now shifts to the US Court of International Trade, with no quick resolution expected

  • The scale of potential repayments could rival or exceed past mass refund efforts, such as the post-1998 harbor tax case, and may also spark additional lawsuits between companies and consumers over tariff-related price increases

Negotiations over a $200 million AI contract between the Pentagon and Anthropic collapsed minutes after a 5:01 p.m. Friday deadline, ending weeks of talks over how the company’s models could be used. The Defense Department demanded authority for all lawful uses, including analysis of unclassified commercial bulk data on Americans, while Anthropic sought binding guardrails to block mass surveillance and fully autonomous weapons. After the deadline passed, Defense Secretary Pete Hegseth labeled Anthropic a “supply chain risk”, cutting it off from U.S. government work

  • Pentagon CTO Emil Michael had already been negotiating with OpenAI as a backup

  • That same night, OpenAI reached a deal to provide AI tools for classified systems, agreeing to the Pentagon’s lawful-use requirement while retaining technical safety guardrails

  • The collapse followed a tense Feb. 24 Pentagon meeting and public exchanges, and Anthropic has since said it will sue over the designation, signaling the dispute is likely to continue

In his State of the Union, President Trump described the economy as strong, while a Reuters/Ipsos poll found that 68% of Americans said they do not believe the economy is booming. Inflation moderated from 3.0% in January 2025 to 2.4% in January 2026, although some essential categories, including electricity (+6.3%), continued to see price increases. Job growth slowed in 2025, with 181,000 positions added over the year, the unemployment rate rising from 4.0% to 4.3%, and much of the hiring concentrated in the health care sector

  • Stocks performed strongly, with the S&P 500 up 16.4% in 2025 after a 23.3% gain in 2024, despite volatility tied to tariffs

  • GDP growth continued but slowed from 2.8% (2024) to 2.2% (2025), with spending increasingly driven by high earners

  • Housing remained strained: mortgage rates fell from 6.96% to 6.09%, but median home prices edged up from $393,400 to $396,800, leaving affordability tight and sales near a 30-year low

Rapid AI advances have sparked a broad sell-off as investors reassess business models across the S&P 500. The iShares Tech-Software ETF (IGV) is down 24% YTD, with Salesforce (-28%), Adobe (-25%) and ServiceNow (-30%) among the steepest decliners, while Workday hit a five-year low and IBM logged its worst daily drop in 25 years after new AI tools automated legacy code updates and consulting-heavy tasks

  • AI tax tools pressured financials, sending American Express down 6% and major banks, including JPMorgan, Citigroup and Morgan Stanley, over 4%

  • Cybersecurity firms such as Cloudflare also declined following new AI security launches

  • Real estate and logistics stocks fell on fears AI could reduce labor needs and office demand

  • While some analysts call the “AI Scare Trade” overdone, the declines reflect mounting concern over margin compression and job displacement across multiple sectors

IPOs & EXITS

Predictions of a major IPO rebound in 2026 haven’t materialized, but activity has been relatively solid: 11 venture- or seed-backed U.S. companies have gone public so far this year, raising just over $3 billion, strong for early-year activity, though still far below the 2021 peak. The largest IPO was construction tech firm EquipmentShare, which raised over $700 million and recently had a market cap above $7 billion, followed by space tech company York Space Systems, recently valued around $3.4 billion

  • SaaS companies, once IPO mainstays, are largely absent amid an AI-driven selloff

  • No venture-backed SaaS unicorns have filed this year; Figma and Navan are down sharply, and Liftoff withdrew its IPO

  • The IPO market is uneven: weak for AI-exposed software, but still anticipating potential blockbuster debuts like SpaceX

 

SpaceX is reportedly planning to file confidentially for an IPO as soon as next month, targeting a potential June listing that could become the largest ever. The company may seek a valuation above $1.75 trillion and raise up to $50 billion, surpassing Saudi Aramco’s $29 billion record IPO in 2019. Following its February acquisition of xAI, which valued the combined entity at $1.25 trillion, SpaceX would rank among the five most valuable S&P 500 companies at the targeted valuation

  • Proceeds are expected to fund Starship development, space-based AI data centers and a lunar base

  • Major banks including Bank of America, Goldman Sachs, JPMorgan and Morgan Stanley are reportedly involved, and the company is considering a dual-class structure to preserve insider control

WHAT A TIME TO BE ALIVE

Women-led VC fundraising declined sharply in 2025, with just six new firms launched, down from 29 in 2024 and the lowest total since 2011. Overall, 127 women-led funds (defined as firms with at least half women GPs) closed on $2.45 billion, down from 170 funds raising $3.88 billion in 2024, marking a 37% drop in capital raised and a 25% decline in fund count. Women-led funds accounted for 3.06% of the $80.1 billion raised globally in 2025, slightly up from 3.01% of $128.7 billion in 2024. Fund formation has fallen each year since peaking in 2022 (53 new firms)

  • In 2025, 55 funds opened fundraising (vs. 84 in 2024), with 31 disclosing targets averaging $84.9 million (median $50 million)

  • Fresh capital metrics also weakened: the average new capital raised was $27.57 million (down ~22%), and the median fell below $10 million for the first time to $9.11 million

  • The largest raise dropped from $500 million in 2024 to about $259.8 million in 2025 (Rethink Impact)

  • While a few notable funds closed, overall trends show contracting fund formation, smaller raises and continued pressure on women-led VC fundraising

AI8 VENTURES HIGHLIGHT

State of VC Report: The AI Power Law

“Every technological revolution has two halves: the bubble and the golden age that follows.”

Carlota Perez, economist and author of Technological Revolutions and Financial Capital (2002)

The stock market is at all-time highs, but inflation remains sticky and the job market is weakening. Ask around and you’ll hear the same refrain: the labor market feels tougher than ever. At the same time, the first wave of AI agents is “joining the workforce”. Imagine a software engineering agent capable of performing most tasks of a mid-level developer. Now imagine thousands. Extend that across every knowledge field, and the implications for productivity, and potential displacement, are profound.

What happens when the next round of layoffs hits? Add tariffs on top, and ask what happens if consumption weakens. Even the Federal Reserve admits it is unsure of what comes next.

Against this backdrop, venture capital in 2025 is not in recovery but in recalibration. The illusion of recovery is powered almost entirely by AI. Capital is flowing, but to fewer companies than ever. Outside AI, down rounds are rising, and nearly half the unicorn population hasn’t raised since 2022.

We are living in an AI bubble. Just four mega caps, Nvidia, Meta, Microsoft, and Broadcom, accounted for 60% of the S&P 500’s gains, with Nvidia alone responsible for more than a quarter. It’s a paradox. Yes, we’re in a bubble, but it’s also the future. We are witnessing what may be the most important technological shift in a generation. It’s hype layered on top of something undeniably real.

Uncertainty is the name of the game; not one single path forward, but divergent scenarios. Alpha will be earned through selectivity, by navigating volatility rather than avoiding it.

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Happy reading,

8alpha.ai’s Research & Investment Team