__________
lots of VC in AI right now
#6 | Posted by ClownShack at 2026-07-12 12:20 PM
- - - - - The Vietcong are back and they're doing AI???
VC stands for "Venture Capital" - quite a lot of VC firms are in Silicon Valley.
If you read a little further in the article than the hype about SV you'll find this about "why" and concentration of capital in a specific industry within technology sector:
|------- ... To be sure, the surge in the size and number of monster deals could be overshadowing other money-raising efforts from smaller companies and investment by smaller funds, industry experts said.
Nearly 90% of invested dollars went to AI firms, up from last year, when around 65% of new funds were allocated to AI.
"If you're a tech company and you're not an AI company, you have a very, very difficult opportunity ahead of you to raise capital," Stanford said.
This concentration of capital in AI leaves smaller, middle-of-the-road venture funds without large AI holdings struggling to return capital to their investors.
Only the largest funds, such as Andreessen Horowitz and Sequoia Capital - which possess the war chest to back OpenAI, Anthropic, and SpaceX - stand to gain from their initial public offerings of stock.
"It's going to concentrate the fundraising over the next few years as well into these already very large names," Stanford said.
Beyond the two potential blockbuster listings - Anthropic and OpenAI, each valued around $1 trillion - the IPO pipeline is thin.
"We don't really have a strong IPO market," Stanford said. "Obviously, SpaceX's IPO is great. OpenAI and Anthropic, if they go out this year, will be very large drivers of distribution. But a vast majority of investors do not have exposure to them, and so that money will not make it back to them." ...
-------|
Well, OpenAI delayed IPO because of fear that the current valuation is closer to $750B, which is far short of $1T and would be considered a "failed IPO"... Anthropic is watching for now, since it's in only slightly better position than OpenAI.
There are already doubts about when or if the ROI on AI will materialize, and the tremendous debt needed to be raised for capex, due to rising costs of datacenters, memory and quickly outdated processors and availability of energy and qualified AI personnel, as well as ongoing "brain drain" due to Trump's immigration and "China Initiative" policies.
If OpenAI and Anthropic IPOs "fail" it could spell the beginning of the bust of entire hugely overvalued market, e.g., SPCX has already given most initial gains from IPO price.
Concentration is not just in the US - TSMC, Samsung, and SK Hynix now make up more than 30% of the MSCI Emerging Markets Index - as much as the exposure of the "Mag 7" in the S&P 500. Overall, technology accounts for 45% of the emerging market index.
Some may remember the high concentrations in overvalued markets during dot-com bubble of 1999-2000 and financial bubble of 2006-2008.
__________
