Five VCs corner 73% of AI funding

Other (14)

• Alex highlights a significant concentration in venture capital, with five US firms capturing 73.1% of all LP commits in Q1 this year, up from 12 firms securing 75% in 2025.
• Michael Eisenberg suggests the venture capital industry, as a craft business, might be nearing its end due to this capital concentration, leading to 'consensus capital' and potentially less funding for truly innovative projects.
• Larry Covert distinguishes between 'consensus VC' (CVC) and 'traditional VC' (TVC), focusing his firm, Ox Cart Ventures, on the latter which involves hands-on support for pioneering founders, often outside major tech hubs.
• Michael Eisenberg argues that capital engorgement in venture capital leads to sunk ownership levels, diluting investor stakes and making the math of asymmetric returns unworkable when IPOs underperform or don't materialize.
• Mike Granoff believes demand for medium-sized VC firms will likely increase, as founders prefer working with accessible partners on a 'WhatsApp basis' rather than large, less hands-on behemoths.
• Michael Eisenberg states that globally, the number of breakout startups is not increasing, and the influx of capital into the system drives competition, ultimately reducing overall returns for the industry.
• Michael Eisenberg cautions that AI companies often have non-software gross margins due to high token and compute costs, warning that current high valuations might mask underlying profitability issues for Wall Street.
• Mike Granoff highlights energy as a critical limiting factor for compute growth, driving innovation in off-grid solutions like virtual power plants and specialized energy sources for data centers or manufacturing facilities.
• Larry Covert describes their portfolio company Web AI, an Edge AI firm, which started with a $70 million valuation, then a $700 million co-led round, and a recent $2.5 billion round led by Time Ventures in January.
• Michael Eisenberg predicts a global reordering towards 'sovereign allied supply chains' due to US-China competition and ongoing conflicts, leading to weaker Europe and rising Middle Eastern and Southeast Asian economies like India and Indonesia.
• Michael Eisenberg argues that while GenAI is dominated by Silicon Valley, innovation in other deep tech areas like defense, chemistry, and manufacturing can thrive in modular, localized ecosystems such as Austin, Tel Aviv, and Grand Rapids.
• Michael Eisenberg forecasts the Tel Aviv Stock Exchange will become the 'Nasdaq of the current decade,' providing a listing venue for deep tech companies that do not meet the $10 billion threshold for US exchanges.
• Larry Covert and Mike Granoff emphasize the life-saving potential of autonomous vehicles, with Larry sharing a personal experience of Tesla's Full Self-Driving preventing an accident after 10 billion miles of accumulated data.
• Michael Eisenberg argues that media narratives significantly influence public perception and policy, citing examples like the lack of Uber in Israel due to taxi lobbies and negative framing of AV accidents despite clear safety data.

Other (5)

• Jeff Dorman argues crypto venture funds now operate with 10-year lockups while actively trading liquid tokens, creating a structural mismatch between venture fees and hedge fund labor.
• Jeff Dorman notes many firms holding liquid assets like Solana or Ethereum function as unacknowledged hedge funds, lacking proper infrastructure to hedge or exit efficiently.
• Matt Walsh observes Limited Partners are demanding real-time transparency and clear demarcations between private equity and liquid token holdings from crypto funds.
• Limited Partners are questioning why launched, trading tokens are valued at a discount or remain undistributed. This friction highlights a broader transparency crisis.
• Matt Walsh suggests 'liquid venture' is emerging as a distinct asset class requiring its own rules. This pushes funds toward professional back-office operations and audited updates.