Weekly Download #20

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This week, the global tech market officially split, where the US Senate decides who gets chips first and China weaponizes rare earth minerals like it's playing Civilization VI.

Also, OpenAI is simultaneously buying from Nvidia, trading equity to AMD, and designing chips with Broadcom because one catastrophic vendor relationship just isn't enough.

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OpenAI's hardware deals with Nvidia and AMD reveal a desperate scramble for compute at any cost. Now add Broadcom to the mix, OpenAI is simultaneously buying from Nvidia, giving equity to AMD, and designing custom chips with Broadcom.

The Three-Way Deal:

Translation: When you can't get enough chips from one supplier, you don't just find alternatives, you become your own chip designer. Sam Altman claims they're "embedding what we've learned from frontier models directly into hardware."

Reality: They're so desperate for compute they're now in three separate mega-deals that won't deliver capacity until 2029.

Jensen Huang calls AMD's 10% equity offer to OpenAI "imaginative", corporate speak for "insane." AMD is giving away $24B in value for a single customer, while their MI450 chips don't even exist yet.

The Desperation Hierarchy:

Reality Check: The compute bills are so astronomical that OpenAI is paying suppliers with equity, restructuring ownership with every deal. If OpenAI, which prints money from ChatGPT subscriptions, can't pay for compute with cash alone, what does that say about every other AI company?

Musk's xAI is closing $20B in equity and debt, with Nvidia investing $2B. The cash flows through an SPV that immediately buys Nvidia GPUs, which xAI then leases for Colossus 2.

The Financial Engineering:

Translation: Your chip supplier becomes your investor, and the investment immediately flows back to them. It's vendor financing with extra steps.

Internal Oracle documents reveal what happens when you actually try to make money: $900M revenue from renting Nvidia servers netted just $125M profit, a 14% margin versus 70% for traditional software.

The Brutal Math:

The Bottom Line: The AI infrastructure boom has created a bizarre new economy where companies design their own chips to escape vendor lock-in, suppliers become shareholders, and traditional tech economics no longer apply.

The Senate passed a measure requiring Nvidia and AMD to prioritize US customers over China, formalizing a "home-market-first" policy through the NDAA. Companies making billions from Chinese data centers just got told their best customer is now last in line.

Meanwhile, Trump announced 100% additional tariffs on Chinese imports starting November 1, plus export controls on "any and all critical software." The double punch: tariffs make Chinese goods toxic while software bans block US AI models from China entirely.

The New Rules:

China launched customs crackdowns on Nvidia's chips, with stringent inspections replacing "pay duties and go." ByteDance and Alibaba were ordered to halt all Nvidia testing, while $1B in chips were smuggled in just three months.

Then came the retaliation: Beijing unveiled export controls on rare earths mirroring US extraterritorial rules. Companies worldwide must certify zero Chinese rare earths, echoing the "de minimis" rules that crippled Huawei.

The Escalation:

Taiwan shrugged off China's rare earth controls. TSMC doesn't use the specific rare earths China weaponized (holmium, thulium, europium, ytterbium).

Translation: China tried to squeeze the semiconductor jugular and grabbed the wrong artery. Years of Western restrictions pushed Taiwan to diversify suppliers precisely for this moment.

The Bottom Line: The global AI market isn't just fracturing, it's being carved into incompatible spheres where your government determines your customers, suppliers, and software stack.

🤖 Reflection.AI's $2B for Being Ex-DeepMind: The startup that hasn't shipped a single model just raised at an $8B valuation (15x jump in 7 months) because the founders helped build AlphaGo and Gemini. NVIDIA threw in up to $500M betting that two ex-DeepMind guys can out-open-source China's DeepSeek.

🔋 Base Power's $1B Because Texas Grid Still Sucks: Zach Dell (yes, Michael's son) raised a casual billion at $3B valuation to put batteries in Texas homes. Customers pay $700 upfront for a battery 2x bigger than Tesla's, then Base uses it to trade electricity when you're at work. They've deployed 100MWh in 2 years and are building a factory.

📊 Kalshi Hits $5B for Legalizing Gambling on Everything: The MIT grads who convinced the CFTC that betting on elections is "price discovery" raised $300M from a16z and Sequoia. Now doing $50B in annual volume (up from $300M) and expanding to 140 countries because apparently everyone wants to bet on whether it'll rain tomorrow.

⚙️ n8n's $180M for Fixing AI's Dirty Secret: The German workflow automation startup hit $2.5B valuation (7x increase) because someone finally admitted that AI agents can't actually do anything without being wired into 47 different enterprise tools. 80% of their workflows now use AI, proving that "autonomous" agents need a lot more babysitting.

🎰 SoftBank's Arm-Collateralized AI Gamble: Borrowing $5B through a margin loan secured by Arm shares to fund more OpenAI investments, bringing total Arm-backed loans to $18.5B. Nothing says conviction like leveraging your only successful bet to place another one.

🏗️ a16z's $69B Infrastructure Hire: Hired ex-VMware CEO Raghu Raghuram as general partner overseeing AI infrastructure and growth investments, replacing Scott Kupor as managing partner. Nothing says AI credibility like poaching the executive who built VMware into a $69B Broadcom acquisition.

⛓️ YZi Labs' Identity Crisis Fund: The artist formerly known as Binance Labs launched a $1B Builder Fund offering up to $500K per team for BNB Chain development in trading, AI, and DeFi. At $500K per team, that's 2,000 builders to justify the name change.

🇨🇳 Chinese VCs' Cautious Comeback: Top Chinese VCs are close to raising up to $1.1B in total USD-denominated funds in 2025, marking a tentative return of global capital to Chinese tech. Apparently $1.1B counts as a comeback when you're desperate enough.

✈️ Navan's Down-Round Debut: Corporate travel platform Navan is targeting a $6.45B valuation in its IPO, planning to raise up to $960M. That's a 30% haircut from its $9.2B private valuation in 2022, turns out business travel software isn't as essential post-pandemic as VCs thought.

🤖 SoftBank's Physical AI Shopping Spree: SoftBank is acquiring ABB's robotics business for $5.4B, paying 2.3x the division's $2.3B in 2024 revenue with a mid-2026 closing expected. After bleeding billions on WeWork's fake AI and FTX's fake everything, Masa Son is apparently betting that actual robots doing real work might finally be a winning strategy.

💳 BVNK's Bidding War: Coinbase and Mastercard are battling to acquire the London stablecoin infrastructure startup for $1.5B-$2.5B, which would be the largest stablecoin acquisition ever. Nothing says "stablecoins are going mainstream" like two payment giants fighting over the pipes.

Here's a roundup of notable recent funding rounds across the Bay Area:

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That's a wrap on another week where a company worth $240B gave away 10% of itself for chips that don't exist yet, the US and China turned semiconductors into weapons of economic warfare, and OpenAI decided the solution to unsustainable compute costs was to become three different companies' biggest customer simultaneously.

Remember: when your business model requires the power consumption of a small country and you're paying for it with equity instead of cash, you're not building the future, you're mortgaging it to whoever owns the silicon.

Till next time!

P.S. Raised this week, and we missed you? Want to be featured? Have tips or funding questions? Reply or DM us as we’re here to help.

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