Is a Bond Market Crisis Looming?
Week of February 17th, 2025
Welcome to AI8’s weekly newsletter, your ultimate source for curated insights and updates from the dynamic world of venture capital!
We’ve scoured the vast landscape of the web to bring you a comprehensive roundup of the industry’s top news articles, all in one convenient place. We keep you ahead of the game and in the know about all things related to the vibrant world of investments
STARTUPS
ROUNDS AND UNICORNS
The Week’s Biggest Funding Rounds: Robotics And Legal Tech Top Bounce-Back Week (Crunchbase, 5 minute read)
Apptronik (Robotics): The Austin-based AI-powered humanoid robotics company secured a $350M Series A led by B Capital and Capital Factory, with participation from Google. Funds will support the development of Apollo, its industrial humanoid robot
Harvey (Legal Tech): The San Francisco AI legal tech startup raised a $300M round led by Sequoia, doubling its valuation to $3B. Harvey develops AI tools for legal research, document review, and contract analysis
QuEra Computing (Quantum Computing): Boston-based quantum computing firm raised $230M from SoftBank Vision Fund and Google Quantum AI. Its neutral-atom quantum technology aims to reduce error rates in quantum systems
Abcuro (Biotech): Massachusetts-based biotech firm secured $200M in Series C funding led by NEA to advance therapies for autoimmune diseases and cancer using cytotoxic T cells
Chestnut Carbon (Climate Tech): The New York-based startup raised $160M in Series B funding to expand forest development on marginal lands, generating verified carbon credits for corporations
Hundreds Of Unicorns Haven’t Raised New Funding Since 2021 (Crunchbase, 3 minute read)
An estimated 517 global unicorns have not raised new funding since 2021, per Crunchbase data. These startups, spanning sectors such as SaaS, e-commerce, AI, fitness, and analytics, collectively raised $260 billion, with $80 billion going to U.S. companies. While some of these companies remain financially stable after raising large rounds during the boom years, others face a more uncertain future. Startups typically raise follow-on rounds within three years, and those that go beyond four years without fresh capital rarely secure new funding
SaaS: 45 U.S. unicorns (e.g., Carta, Tanium, Sysdig) have gone unfunded since 2021, as market corrections and AI integration pressures hit the sector
E-Commerce & Shopping: 36 unicorns have stalled on funding, despite raising $14B+ in total. Big names include Reef Technology and Dutchie
Fitness & Wellness: 12 unicorns, such as Noom ($540M) and Zwift ($450M), have seen a drop in investor interest
AI & Analytics: 56 U.S. unicorns in these still-hot spaces haven’t raised since 2021, despite collectively pulling in $18B before
INDUSTRY
AI investments surged 62% to $110B in 2024 while startup funding overall declined 12% (Techcrunch, 5 minute read)
Venture capital funding for AI startups surged in 2024, reaching $110 billion—62% higher than the previous year—while overall tech investments declined by 12% to $227 billion. AI’s dominance is attributed to its widespread applications across hardware, infrastructure, and foundational models. Open-source AI funding remained modest, comprising 12% of total AI VC investment. Leading AI investors included Antler, a16z, General Catalyst, Sequoia, and Khosla Ventures
Major AI funding rounds included Databricks ($10B), OpenAI ($6.6B), Anthropic, Waymo, Anduril, xAI, and Vantage
Generative AI raised $47.4 billion, while foundational AI attracted the fastest-growing investment
The U.S. led AI funding, securing 42% ($80.7B) of global VC investment, compared to 25% in Europe and 18% in other regions
Breaking The Wealth Barrier: Why The SEC Should Redefine ‘Accredited Investor’ (Crunchbase, 3 minute read)
The SEC’s outdated accredited investor rules prevent millions of capable Americans from investing in private companies. Currently, individuals must have a $1M net worth (excluding their home) or an annual income of $200K ($300K with a spouse) to qualify—criteria that favor inherited wealth over financial expertise. ICAN (Investor Choice Advocates Network) has filed a writ of mandamus to force the SEC to update these rules, which the agency is legally required to review every four years but has failed to do for over two years
The rigid thresholds limit funding for startups and small businesses, particularly harming women, minorities, and lower-income investors
Other countries like the U.K. and Australia allow investors to self-certify or qualify through credentials, proving a better model
A reformed framework based on financial knowledge would unlock capital, foster innovation, and boost economic growth, making private markets more inclusive and dynamic
ECONOMIC SNAPSHOT
Trump’s trade war could spiral into a debt war that sends interest rates soaring, former White House official warns (Fortune, 4 minute read)
According to Peter Orszag, former director of the Office of Management and Budget, President Donald Trump's aggressive tariff plans could lead to retaliation beyond just duties, including affecting the U.S. bond market. Orszag warned that foreign governments could sell their U.S. debt holdings as a form of retaliation, potentially triggering a major selloff in the bond market. If foreign entities unloaded a portion of the $8.6 trillion in U.S. Treasuries, it could drive down bond prices and cause yields to rise
This would not only increase borrowing costs for the U.S. government but could also affect other borrowing rates, such as mortgages
Orszag further noted that with a significant portion of U.S. debt maturing in the coming years, any additional selling pressure from foreign creditors could push interest rates up significantly, especially as the U.S. needs to issue more debt to finance its budget deficit
In this scenario, the U.S. could face higher borrowing costs, complicating efforts to manage its debt
Key takeaways from Fed Chair Jerome Powell’s congressional hearing (5 minute read)
On February 13, Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee in Washington, DC, stating that the Fed is in no rush to cut interest rates, aligning with expectations for rates to remain steady at the March 2025 meeting. The Fed previously reduced rates by 1.0 percentage points over three meetings in 2024, but with inflation still hovering above the 2.0% target officials see no urgency to adjust policy further
A major focus was the dismantling of the Consumer Financial Protection Bureau (CFPB), with Democrats defending its role in consumer protection—having returned $21 billion to consumers—while Republicans criticized its lack of accountability
Powell also faced questions on tariffs and trade but largely avoided taking a stance. Meanwhile, on February 12th Donald Trump imposed a 25% tariff on all steel and aluminum imports, following a 10% tariff on Chinese imports on February 1st
The National Federation of Independent Business Uncertainty Index surged to its third-highest reading on record
Despite policy changes, the U.S. economy remains strong, with 2.5% GDP growth in 2024 and 4.0% unemployment in January 2025
US inflation unexpectedly increases (BBC, 5 minute read)
US inflation rose to 3% in January, surpassing expectations and reaching a six-month high. The increase was driven by higher prices for essentials like eggs and energy, alongside rising costs in car insurance, airfare, and medicine. Core inflation, which excludes food and energy, rose at its fastest pace since March
The Federal Reserve kept interest rates unchanged in January, citing persistent inflation above its 2% target
The inflation uptick presents a challenge for President Trump, who campaigned on lowering costs but has proposed tariffs that economists warn could push prices higher
Some analysts now predict no rate cuts this year, and financial markets reacted with lower stock prices and rising government bond yields
Trump tariffs: what are reciprocal tariffs and how will they affect US consumers? (The Guardian, 5 minute read)
Donald Trump has once again threatened to impose new tariffs on U.S. imports, aiming to reshape global trade. On Thursday 13th, he announced plans for “reciprocal” tariffs, ensuring that U.S. import taxes match those imposed on American goods by other countries. While no new tariffs were formally introduced, Trump directed officials to identify nations for potential duties. So far, only a 10% tariff on Chinese goods has been implemented
Previously, his administration proposed a 25% tariff on Canada and Mexico, a 10% levy on Canadian energy exports, and amended duties on steel and aluminum
Trump views tariffs as a tool to pressure manufacturers to shift production to the U.S., but this comes at a cost—higher import prices, which are typically passed on to consumers
Key U.S. imports like crude oil from Canada, fruits and auto parts from Mexico, and electronic chips from China could see price hikes
Trump has broad authority to impose tariffs under federal laws like the International Emergency Economic Powers Act (IEEPA) and Section 232 of the Trade Expansion Act, which he previously used to tax Canadian, Mexican, and EU metals in 2018
DeepSeek drives $1.3 trillion China stock rally as funds pile in (Yahoo Finance, 4 minute read)
DeepSeek’s AI breakthrough is driving a shift in stock fund investments from India back to China. Hedge funds are rapidly increasing their positions in Chinese equities, fueling a $1.3 trillion gain in China’s markets over the past month, while India’s market has shrunk by more than $720 billion. The MSCI China Index is set to outperform India’s for a third consecutive month, the longest streak in two years
The valuation gap further supports China’s attractiveness, with the MSCI China Index trading at 11 times forward earnings estimates compared to 21 times for India
Alibaba has gained $100 billion in value over the past five weeks, and the Hang Seng Tech Index has entered a bull market
While DeepSeek’s momentum is accelerating China’s market recovery, expectations of additional government stimulus remain crucial
Some investors are still cautious, citing past failed rallies in China and concerns over AI monetization
IMPACT & CLIMATE RESILIENCE
Jamie Dimon Reportedly Says He’ll Cut Some ‘Stupid’ DEI Costs At JPMorgan Chase—Here Are All The Companies Rolling Back DEI (Forbes, 6 minute read)
JPMorgan Chase CEO Jamie Dimon recently announced plans to cut unnecessary expenses, including those deemed “stupid” costs. When asked about DEI (Diversity, Equity, and Inclusion) programs, he clarified that cost-cutting measures were about efficiency rather than responding to political pressure. His statement comes amid a wave of corporate rollbacks on DEI initiatives across major companies. Since early February 2024, several corporations have scaled back or eliminated DEI programs:
Goldman Sachs dropped its board diversity requirements, Disney rebranded its DEI efforts as “Talent Strategy,” and Deloitte instructed employees to remove pronouns from email signatures while reducing its DEI commitments
Some companies continue to support DEI: Costco overwhelmingly rejected a proposal to reassess its DEI risks, with 98% of shareholders voting against it. Apple, Delta Airlines, Cisco, Deutsche Bank, and the NFL have reaffirmed their commitment to diversity initiatives
The shift in corporate DEI strategies is influenced by changes in federal policy under former President Donald Trump, whose administration issued executive orders banning DEI in government agencies, the military, and federally funded institutions
IPO & EXITS
Visualizing Global IPOs in 2024, by Country (Visual Capitalist, 4 minute read)
In 2024, global IPO markets thrived despite economic uncertainty, fueled by strong stock market momentum, rate cuts, and tech advancements. India led in IPO volume with 327 listings ($19.9B), while the U.S. topped proceeds at $32.8B, hosting 183 IPOs, over half from foreign companies
High-growth sectors—technology, industrials, and consumer goods—accounted for 60% of IPOs
Chinese IPOs saw the highest average returns (123.9%)
With monetary easing expected in 2025, AI, clean energy, and digital finance sectors are poised for continued IPO growth
Adapting The IPO Roadmap For Today’s Market (Crunchbase, 4 minute read)
The IPO landscape has shifted, making the journey to going public slower and more challenging. Investors remain highly selective amid economic uncertainties, requiring companies to adapt their IPO strategies. Cybersecurity has become a critical priority, with the global average cost of a data breach reaching $4.88 million in 2024, a 10% increase from the previous year. With $80 billion in U.S. unicorns sitting unraised, private capital from VC and PE firms has prolonged IPO timelines
Late-stage fundraising is now the norm, as companies stay private longer, raising multiple funding rounds before going public
Venture capital funding for U.S. and Canadian startups reached $61.9 billion in Q4 2024, bouncing back from 2023 lows
As valuations recover, companies like Chime, GrubMarket, and Arctic Wolf are in the pipeline for 2025 IPOs
With Turo Withdrawal, A Slim IPO Pipeline Gets Thinner (Crunchbase, 4 minute read)
The already weak tech IPO market is shrinking further, with peer-to-peer car rental platform Turo withdrawing its $100M+ public offering plans. The company, which reported $722M in revenue for the first nine months of 2023 gave no specific reason for pulling out. However, its reputation suffered after vehicles rented on its platform were used in two separate New Year’s Day attacks
Founded in 2009, Turo has raised nearly $500M in venture funding from investors like IAC, G Squared, and August Capital
The tech IPO pipeline remains thin, with few venture-backed companies filing public disclosures
AI chip company Cerebras and expense platform Navan have confidential filings, but no major public listings have surfaced
In 2024, only $227B was raised across all tech startups, a 12% decline from 2023
AI8 VENTURES HIGHLIGHT
Trumponomics 2.0
Following President-elect Donald J. Trump’s victory over Kamala Harris, the financial world witnessed an immediate response. In just one week, the S&P 500’s value surged by $1.9 trillion, pushing stocks to record highs. The U.S. dollar strengthened globally and Bitcoin achieved unprecedented highs.
Wall Street is preparing for more government spending, lighter regulation, bigger deficits, and accelerating growth under a Trump administration and a Republican-led Congress.
Biden’s Economic Legacy
The Biden era was marked by headlines of massive layoffs and a cost of living crisis. The average worker faced double-digit increases in food, energy, housing, and other essential expenses that impacted middle-class families the most and consumed the bulk of household budgets. Despite record highs in the stock market, nearly half of Americans believed the nation was in a recession. Is this Biden’s fault? No. Global supply chain disruptions, stimulus checks, the aftermath of COVID-19 lockdowns, and the ripple effects of geopolitical tensions all contributed to soaring prices. Did Americans blame Biden? Election results suggest they did. Two-thirds of voters believed the economy was on the wrong track.
Hence, Trumponomics 2.0.
Trump’s campaign capitalized on promises of economic revival, pledging to deliver low taxes, low regulations, low energy costs, low interest rates, and low inflation -Trumponomics.
Don’t forget to take a look at Alpha Insights Special Edition: Trumponomics Report. Understand everything VC-related that happened in 2024 and how profit will shift under Trump 2.0
(Trumponomics 2.0 Special Edition starts on page 22)
Alpha Insights: 2024 Venture Capital Report
Alpha Impact 8 Ventures is thrilled to share our latest insights into the dynamic world of investments with our 2024 Venture Capital Report.
Last year, Michael Burry, the legendary fund manager who famously profited from shorting the US housing market in 2008, bet more than $1.6 billion on a Wall Street crash by shorting the S&P 500 and Nasdaq-100. Nothing happened.
This year, Warren Buffett’s cash reserves reached a record $276.9 billion as Berkshire Hathaway trimmed its stock holdings in Apple. Some view it as a routine adjustment, while others speculate that Buffett perceives an overheated, overvalued market.
Everyone talks about a soft landing, but warning signs are flashing and the world seems to be teetering on a delicate balance. Is there something we’re missing? Is there an unseen factor at play?
Alpha Impact 8 Ventures is disrupting the industry, generating wealth, creating technology, providing access, leveling the play field, reducing systemic barriers, and building a resilient world.
Become part of the our revolution.
Happy reading,
AI8 Ventures’ Research & Investment Team
