Security experts are debating the adequacy and effectiveness of security during the White House Correspondents’ Dinner—held at the Washington Hilton—after 31-year-old Cole Tomas Allen opened fire outside the ballroom and attempted to charge past security. The incident highlights the heightened tensions and increased political violence in the country.

BoF Disclaimer: We wholeheartedly reject the use of political violence as a means or end.

BoF Analysis: We anticipate seeing continued elevated risk of political violence given the normalization of political violence rhetoric, erosion of institutional trust, and increased access to weapons and amplification mechanisms (social media, network effects). We anticipate continued elevation in lone-actor and small-cell political violence. While conditions for organized, large-scale rebellion don not exist in the United States today, the broader West is not uniformly insulated from that risk.

Heightened Tensions in the Middle East

In the Middle East, the U.S. and Iran remain locked in their standoff, although Iran has provided a proposal to the U.S. that excludes mention of nuclear programs. The U.S. military conducted a helicopter interdiction of the M/V Sevan in the Arabian Sea. The Sevan is one of 19 sanctioned vessels comprising Iran’s ‘Shadow Fleet’.

Despite this interdiction, Iran has succeeded in running the blockade repeatedly, exporting more than 4 million barrels of oil—worth nearly half a billion dollars.

BoF Analysis: Neither side appears incentivized to terminate the conflict quickly. Instead, we are entering a phase of managed confrontation—characterized by intermittent escalation, economic friction, and incomplete enforcement regimes. Iran’s ability to move oil despite interdictions highlights the growing limits of maritime control and sanctions enforcement, a trend that will have cascading effects across global energy markets.

Global Competition in Technology

In AI, China’s DeepSeek released its V4 open source model. According to Artificial Analysis, DeepSeek V4 is back among the leading open weights models, second only to Kimi K2.6. Their scoring puts it roughly on-par with Claude Sonnet 4.6; however, it still lags behind the U.S.’ most advanced closed weight models like GPT 5.5, Claude Opus 4.7, and Gemini 3.1. Based on this, the reaction to DeepSeek V4’s release was much more muted than last year’s DeepSeek-R1 model release.

Nevertheless, China continues to close the gap in open-weight models, even as the United States maintains an edge in frontier, closed systems. Nevertheless, this once more highlights the closing technological gap and the cost curve inversion in competition.

Another AI-related development from China emerged this morning. Meta announced in January of this year, its $2B acquisition of AI startup Manus. The PRC has stepped in, vetoing the transaction and forcing Meta to unwind the deal. Chinese authorities have barred the acquisition over national security and technology export grounds, as it seeks to implement national sovereignty over AI. This is not an isolated decision, but represents an early indicator of a broader, structural decoupling in advanced technologies.

AI is becoming a sovereign capability. Capital, code, and compute will no longer flow freely across borders.

BoF Analysis: We expect this to be but one early example of tech decoupling that China will pursue as they seek to increase competition with the United States. Western investors and companies will find it increasingly difficult to conduct business in China in a way that provides benefits to the West. Applications, models, semiconductors, and all the way down to the supply chains will increasingly become contested.

Across domestic security, regional conflict, and technological competition, the same pattern is emerging: fragmentation, friction, and the erosion of centralized control.

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Operation Epic Fury

• U.S. intercepts sanctioned merchant vessel in Arabian Sea (RT)

• Iranian foreign minister to meet with Putin; blames U.S. for talks breakdown (BBG)

• Iran has succeeded in exporting 4M+ barrels of oil despite U.S. blockade (GN)

• Iran’s military command threatens response if U.S. blockade continues (WSJ)

News Headlines

• Gunman opens fire outside ballroom hosting White House Correspondents’ Dinner (AP)

• DOJ dropped its criminal investigation into Fed chairman Jerome Powell (CNBC)

• China will curb US investment in tech companies after Meta deal (BBG)

• Supreme Court to consider constitutionality of geofencing warrants (NPR)

• King Charles III and Queen Camilla of the United Kingdom set to arrive for State Visit in the United States today (AlJ)

Quantum Tech

• QC companies are in a race to go public (WSJ)

• Scientists propose early-warning system for quantum supply chain as China tightens minerals grip (QI)

• New study suggests next-gen atomic clocks could test whether time can exist in quantum superposition (QI)

• IonQ details ‘walking cat’ architecture for fault-tolerant QC (HPC)

• QCi launches NeuraWave photonic platform for edge AI inference (QCR)

• Stretching and squeezing diamond opens new path for ultra-precise quantum sensors (PHYS)

AI / ML

• Trump says U.S. will get along with Anthropic after Pentagon spat (BBG)

• AI bill would crack down on deepfake distribution and protect whistleblowers (CNBC)

• Anthropic’s new Mythos model was hacked (BBG)

• DeepSeek’s new model met with a resounding chorus of ‘meh’ (RT)

• RAG precision tuning can quietly cut retrieval accuracy by 40%, putting agentic pipelines at risk (VB)

• China orders unwinding of Meta‘s acquisition of AI startup (NYT)

• China’s 360 hunts software flaws with AI, echoing Mythos approach (BBG)

Semiconductors / Chips

• Meta partners with AWS on Graviton chips to power agentic AI (RT)

• Nvidia has not yet sold its H200 AI chips to China: Lutnick (RT)

• Google Cloud launches two new AI chips to compete with Nvidia (TC)

Deal Flow

Funds

• Jeff Bezos’ physical AI startup Project Prometheus is in talks to raise a $10B round at a $38B valuation from JPMorgan and BlackRock (TFN)

• OpenAI will commit $1.5B and PE firms TPG, Bain Capital, Advent, Brookfield, and Goanna Capital will invest a combined $4B in a $10B PE JV meant to increase adoption of OpenAI’s LLMs at PE-backed businesses (PU)

VC

• Anthropic secondary shares are selling at a $1T valuation (TFN)

• Google agreed to invest up to $40B in Anthropic (CNBC)

• AI coding startup ​​Cognition is in early talks to raise a round at a $25B valuation (TFN)

• Chinese AI startup DeepSeek is in talks to raise funds at a $20B valuation to retain staff (RT)

• CuspAI, a UK startup using AI for materials discovery, is in talks to raise an over $200M Series B at an over $1B validation (BBG)

• Quantum Art extends Series A funding to $140M led by Bedford Ridge Capital (QI)

• Finnish AI infrastructure company Verda (fka DataCrunch) raised $117M in funding led by Lifeline Ventures (PU)

• Point2 Technology, an RF-based interconnect startup for AI data centers, raised a $76M Series B extension led by Maverick Silicon (BW)

• Biossil, a biotech company reviving failed drug candidates using AI, raised $70M in funding from OpenAI, Founders Fund, and Staircase Ventures (LDS)

• Orkes, an AI orchestration platform for agentic workflows, raised a $60M Series B led by AVP (BW)

• NeoCognition, a research lab developing self-learning AI agents, raised a $40M seed round co-led by Cambium Capital and Walden Catalyst Ventures (TC)

• ComfyUI, a node-based workflow startup for controlling diffusion-model outputs, raised a $30M round at a $500M valuation led by Craft Ventures (TC)

• Collov, a visual AI startup, raised a $23M Series A led by Brightway Future Capital (PU)

• Zapata Quantum, a quantum software platform, raised an oversubscribed $15M round led by Triatomic Capital (QI)

• QMatter raised $1.2M led by 55 North to advance its quantum compression platform (QI)

PE / M&A / Exits

• Chinese optical transceivers maker Eoptolink picked banks for a $3B Hong Kong listing (BBG)

• AI chipmaker Forge Nano will merge with Archimedes Tech ‌SPAC Partners II in a $1.6B deal (RT)

• Canadian AI startup Cohere agreed to acquire German AI leader Aleph Alpha in a deal that includes a $600M investment from German retailer Schwarz Group (TC)

• Chinese optical-computing company Lightelligence is set to raise $323M in an oversubscribed Hong Kong IPO priced at the top of a marketed range (BBG)

• Quantinuum, the ​quantum computing unit of industrials conglomerate Honeywell, confidentially filed ‌for an IPO (PRN)

Opportunities

• NIST is looking for a high-speed arbitrary waveform generator that it can use to help create digital twin models of semiconductor processes (SAM)

• The Army is looking for VR-based suicide prevention training programs (SAM)

Editor’s Picks

• Reagan and Bush era White House staffer Douglas MacKinnon questions if America would be better without Congress.

• , , and of CHINATALK break down why DeepSeek V4 isn’t impressing, despite its relatively strong performance.

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AI Leads Unprecedented Quarter of Venture Investing

Venture is ripping. The first quarter of this year set new highs for both dealmaking and exits. In fact, according to Pitchbook, dealmaking has been so high this year, that the first quarter’s $267.2B invested exceeds every full-year total except for 2021 ($358B) and 2025 ($321.7B). KPMG puts an even higher amount on the 2026 investments—$330.9B.

Regardless, one of the most remarkable things is the concentration of those investments. In the first quarter of this year, five deals accounted for $195.6B of the invested capital (70.6% according to Pitchbook and 59.1% according to KPMG). These top five megadeals are all AI / data-science deals: OpenAI ($122B), Anthropic ($30.6B), xAI ($20B), Waymo ($16B), and Databricks ($7B).

At the same time, the reality of AI isn’t living up to its promise, at least not yet. We’ve been hearing for months (if not years) that AI will save the United States from its national debt crisis. Elon Musk—ever the tech optimist—has predicted that AI will fix the debt crisis within three years. We can expect President’s Trump pick to chair the Federal Reserve, Kevin Warsh, to push for additional rate cuts. This push is predicated on the idea that AI can increase productivity sufficiently to grow the GDP relative to debt. The White House ‘AI Czar’ David Sacks has pushed this notion on X. Even the President has pushed this narrative that AI will increase productivity and the GDP allowing the United States to outrun the debt, using this to justify run-away spending.

But, the reality remains disconnected from this promise.

We called this out, two months ago, highlighting that AI made no substantive contribution to economic growth in 2025. Now, a National Bureau of Economic Research study of 6,000 executives has supported our previous piece, finding virtually no impact from AI on either employment or productivity.

Now, that may be because much of that capital is flowing into frontier model development, compute infrastructure, and long-cycle capabilities—not into productivity-enhancing deployment at scale across the broader economy. This would slow down the productivity gain.

This means two things:

1. That companies are lying about layoffs. Companies from Amazon to Meta have blamed AI for layoffs. And, it’s bunk. Companies are conducting layoffs to reduce expenditures and boost profits. That’s a normal part of business, but lying about it helps nothing.

2. That AI isn’t producing the productivity boost necessary to grow GDP faster than debt—at least, not yet. It could still happen, but not by 2028 like Musk has suggested. Likely not by 2035. All in all, it’s probably still a ways off, and we need to be more fiscally responsible as countries.

Look, we’re still techno-optimists. We believe in the power of technology to improve the world.

But, that optimism has to be balanced with realism.

We have a long road to go for AI to make the world a veritable utopia.

Nobel Peace Prize and Congressional Medal of Honor

Next up, reports have emerged that President Trump has spoken about a desire to award himself a Congressional Medal of Honor.

For those unaware, the Medal of Honor is the nation’s highest award for military valor in action. The Medal is authorized for any military service member who ‘distinguishes himself conspicuously by gallantry and intrepidity at the risk of his life above and beyond the call of duty

• While engaged in an action against an enemy of the United States;

• While engaged in military operations involving conflict with an opposing foreign force; or

• While serving with friendly foreign forces engaged in an armed conflict against an opposing armed force in which the United States is not a belligerent party.’

That the President can fathom that anything he has ever done in his life rises to this level raises serious concerns about how the President understands and values the sacrifices of the military. Trump has consistently debased our service members; this is but the latest in a 10+ years long pattern of behavior.

Just as he excused his refusal to visit the Aisne-Marne American Cemetery in 2018 (for fear that the rain would mess his hair) by saying ‘Why should I go to that cemetery? It’s filled with losers.’ And as he referred to the 1,800+ U.S. Marines killed at Belleau Wood as ‘suckers.’

Just as he disparaged Vietnam POW/MIAs (and specifically former Senator John McCain) saying ‘I like people who weren’t captured.’

He has no qualms denigrating the more than six-hundred thousand Americans killed in war, the nearly one-hundred fifty thousand prisoners of war, and the more than forty thousand missing in action.

Similarly, he has no issue debasing the conspicuous intrepidity and gallantry of the 3,553 recipients of the Congressional Medal of Honor.

We encourage everyone to visit the Congressional Medal Of Honor Society website and read the citations of any several of the citations and be awed at the heroism that these recipients have displayed. Below are just a handful of summaries—picked entirely at random but highlighting just the incredible feats of this class of service members who stand non-pareil.

• Private First Class Agerholm single-handedly loaded and evacuated 45 fellow Marines over three hours during a heavy Japanese assault on 4/10 Marines on Saipan, dying in the process.

• Private First Class Albanese assaulted a Vietnamese heavy-weapons complex, clearing at least 100m and eight enemy—including dispatching two of them with hand-to-hand combat and protecting his platoon from 5-7 Cavalry’s left flank. He, too, was mortally wounded in his gallant actions.

• Technical Sergeant Anderson (1-381 Inf) protected his Soldiers and repelled a Japanese counterattack against his unit’s flank, hurling mortar duds, firing his simple carbine, and then taking live mortars slamming them against a rock to prime them and throwing them into the attackers. His actions killed at least 25 attackers, destroyed multiple machine guns and enemy mortars, and resulted in Anderson’s wounding.

• Lieutenant Junior Grade Hudner crash-landed his aircraft in rough mountainous terrain and behind enemy lines at the Chosin Reservoir to rescue another downed pilot.

America’s sons and daughters deserve leadership equal to the sacrifice and duty that those sons and daughters display.

Schrödinger’s Strait

On Friday, Iran announced that it would allow maritime traffic to pass through the Strait of Hormuz.

That lasted less than 24 hours.

Iran expected a quid-pro-quo. Iran expected the United States to end its blockade of Iranian ports in the Persian Gulf and Gulf of Oman.

The United States had other plans. In fact, at the time that Iran announced it was opening the Strait, President Trump was clear that he had no intention of lifting the blockade.

As a result, Iran has reclosed the Strait, has fired on merchant ships attempting to transit the Strait or to move from their anchorages in the Gulf, without their permission.

The United States, for its part, has enforced its blockade, turning around nearly 30 ships and going so far as to fire on, disable, board, and seize the Iranian-flagged cargo ship the M/V Touska. Iran has condemned these actions stating that it is a violation of the temporary ceasefire (which is set to expire tomorrow) and amounts to piracy. Iran has further pledged a response.

Set against this background, peace talks were expected to continue this past weekend, in an effort to reach a more permanent peace. But, the peace talks have unsurprisingly stalled.

Two other factors contributed to the stalling. The first is what Iran has called the ‘maximalist’ demands of the United States, suggesting that the two sides are still not seeing eye-to-eye. This remains unsurprising. The United States has sought to end Iranian support for its regional proxies (e.g., Lebanese Hezbollah, Yemen’s Houthis, and to a lesser extent various militia factions in Iraq), and gain assurances that Iran will surrender its enriched uranium and nuclear programs along with much of its missile technology. Iran likely now sees acquisition of a nuclear weapon as paramount to its long term survival.

The second factor was the withdrawal of Vice President J.D. Vance from the United States’ negotiating delegation—the reasons for which remain largely unclear. Regardless, the U.S. team is now represented by Trump’s son-in-law Jared Kushner and Special Envoy Steve Witkoff. Iran has previously stated that they do not view Kushner and Witkoff as good-faith actors and that they would no negotiate with them, which is why Vance was originally added to the delegation. This morning, Vance was added back to the team and is heading to Islamabad.

Taken altogether, the continued U.S. blockade, the high demands, and the ‘will he / won’t he’ of Vance joining the team raise questions about the seriousness with which the United States is approaching negotiations. Tehran seems equally disinterested in reaching a permanent solution as it continues to play a game of geostrategic chicken.

We’ve previously discussed how wars end in one of three ways: culmination of one side, exhaustion of both parties, imposition of a third party’s will. None of those conditions have arisen in the U.S.-Iranian war, yet. Until they do, there is little structural pressure toward a durable peace.

Both sides clearly believe that they can still gain the upper hand, should conflict continue.

Given that, it is increasingly likely that active hostilities will resume tomorrow, with both sides having taken the interlude to regenerate combat power, adjust plans, and prepare for round 2.

We’ll see soon enough which of these narratives collides with reality first.

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Operation Epic Fury

• Iran opened then quickly closed Strait again, when U.S. refused to lift its blockade (CNBC)

• Vessels report being hit by Iranian gunfire as country ‘closes’ Strait of Hormuz, again (DN)

• U.S. Navy fires on, disables, and seizes Iranian cargo vessel (RT)

• Iran vows quick response to U.S. attack on Iranian-flagged ship (AP)

• Ceasefire talks stall over U.S. ‘maximalist’ demands and flare-ups in and around Strait (AP)

• U.S. Ambassador to U.N. Waltz supports Trump’s threats on civilian infrastructure (TH)

• U.S. will delay weapons shipments to European countries amid war (RT)

News Headlines

• Commerce Secretary Lutnick tells Canada ‘they suck’, vows to void trade deal (TH)

• Meta plans to cut 10% of jobs (RT)

• SecDef Hegseth’s feud with Army Secretary Driscoll spills into public view (WSJ)

Quantum Tech

• Nvidia debuts AI models to boost QC (QI)

• Quantum AI just got shockingly good a predicting chaos (SD)

• Senate panel advances quantum reauthorization bill focused on applications and security (NG)

AI / ML

• NSA reportedly using Anthropic‘s Mythos despite ‘supply-chain risk’ label (TV)

• Pentagon contract will give military pilots access to more AI (BBG)

• Trump acknowledged AI risks and backed safeguards for banking (RT)

• Thousands of CEOs admit AI had no impact on employment or productivity (FTN)

• Deep fake influencers are exploding on social media ahead of midterm elections (NYT)

• U.S. will give federal agencies access to Anthropic‘s new Mythos model (BBG)

• Anthropic CEO visited White House amid rising Mythos model fears (WSJ)

• OpenAI accused Anthropic of inflating revenue numbers (TV)

• Co-founders of failed AI startup were charged with fraud (RT)

Semiconductors / Chips

• Musk’s Terafab chip project is asking suppliers to move at ‘light speed’ (BBG)

• Google in talks with Marvell to build new AI chips for inference (RT)

• Nvidia really wants to sell its chips to China (MP)

Extended, Augmented, Virtual, and Mixed Reality

• European Space Agency establishes Extended Reality Competence Center (ESA)

• New VR training system from VRAI and Varjo gives military instructors insight into soldier performance and motivations in training (TDP)

Deal Flow

Funds

• Sequoia raised $7B for a new fund to expand AI bets (TC)

VC

• Global VC investment surged to a record $330B in Q1 (KPMG)

• Anthropic is rejecting funding offers at $800B valuation, for now (TC)

• OpenAI will take a 10% stake in AI chip firm Cerebras as part of a $20B-$30B chip deal as Cerebras seeks to raise $3B in a pre-IPO round valuing the company at $35B (RT)

• Recursive Superintelligence, a four-month-old self-teaching AI startup, raised $500M at a $4B pre-money valuation led by GV (TFN)

• Chinese AI startup DeepSeek looks to raise $300M+ at ‌a $10B valuation (RT)

• Sygaldry, a quantum-accelerated AI servers company, raised $139M across a Series A and seed round led by Breakthrough Energy Ventures and Initialized Capital (QI)

• Aria Networks raised $125M in a funding round led by Sutter Hill Ventures to provide AI networking capabilities (VND)

• Loop, a supply-chain AI startup, raised a $95M Series C led by Valor Equity Partners

• nEye.ai, an integrated optical interconnects company, raised an $80M Series C led by Sutter Hill Ventures (TS)

• U.K.-based Wayve raised a $60M Series D extension led by Qualcomm, AMD, and Arm to scale its mapless autonomous driving AI (TS)

• Subra, a Danish deep-tech high-temperature superconductor cable company, raised a $47M Series A led by Novo Holdings (PU)

• Mintlify, an AI knowledge infrastructure startup, raised a $45M Series B at a $500M valuation co-led by a16z and Salesforce Ventures (FSME)

• Resolve AI, an AI for running and operating software in production, raised a $40M Series A extension at a $1.5V valuation led by DST Global and Salesforce Ventures (SA)

• Auctor, an AI platform for coordinating software implementation, raised a $20M Series A led by Sequoia

• TextQL, an agentic analytics startup, raised $17M from Blackstone, HOF Capital, Neo, Dropbox, and more (TFN)

• AlixLabs, a European developer of Atomic Layer Etching (ALE) solutions for next-generation semiconductor manufacturing, raised a $17.5M Series A and strategic round from Stephen Industries (TEU)

• Phonely, a voice AI startup, raised a $16M Series A at a $100M valuation led by Base10 Partners (PU)

• HYFIX Spatial Intelligence raised a $15M seed round led by Craft Ventures to develop chips for drones and robots (VND)

• Creao AI, a ‘super agent’ AI startup, raised a $10M round led by Prosperity7 Ventures (BW)

• Antioch, a simulation startup for robot developers, raised an $8.5M seed round at a $60M valuation led by A* and Category Ventures (TRR)

• Australia-based Deteqt raised a $5M seed round led by Main Sequence for defense-use quantum sensing (SUD)

• Germany-based Peak Quantum raised a $2.6M pre-seed led by Cloudberry Ventures to develop quantum chips (TEU)

• Italy-based Neocad raised a $647K pre-seed led by 40Jemz Ventures to develop AI CAD systems (SUB)

PE / M&A / Exits

• Israel-based silicon photonics developer DustPhotonics was acquired by Credo Technology Group Holding Ltd for $1.3B (DCD)

• Falak Holding acquired a majority stake of Middle Eastern AI company Kernal AI in a transaction with undisclosed terms (WMD)

• AI chipmaker Cerebras Systems filed publicly for an IPO (CNBC)

• Korean AI chip ​startup DeepX is preparing a Korea IPO (TIA)

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All participants in the war must believe that ending the war is preferable to continuing to fight. That means that they must believe that either:

• They’ve largely achieved their goals, or

• They’re incapable of doing so and therefore a less-than-ideal peace becomes the best they can hope for

Peace treaties usually require complex and lengthy negotiations:

1. The Paris Peace Accords (Vietnam War) were negotiated over five years that involved a number of fits and starts. During that period, more than twenty thousand U.S. servicemembers died in combat.

2. The Korean War still doesn’t have a formal peace treaty after 73 years. Instead, the Peninsula’s ceasefire has largely held following the signing of an armistice. Negotiations for that armistice began on June 10, 1951 and was signed July 27, 1953, taking 778 days. To be certain, by the time negotiations started the most brutal fighting (e.g., Pusan, Chosin, Kunu-ri) were already over. Nevertheless, during negotiations, more than 7,500 U.S. servicemembers died in combat.

3. The Paris Peace Treaty formally ending the Second World War wasn’t signed until February 10, 1947—nearly two years after Victory in Europe Day. Active negotiations for the treaty ran for two-and-one-half months.

The point is that expecting 21 hours of negotiations between two sides deeply skeptical and suspicious of one another to succeed in resolving meaningfully different positions shows grave naivety. In other words, we would have been more surprised if the Islamabad negotiations had led to a permanent and meaningful end to the U.S.-Iran war.

As a result of the less-than-fruitful negotiations, President Trump has stated that he ‘doesn’t care’ if Iran returns to peace talks later as he directs a series of actions including a counter-blockade that will stop any ship that Iran allows to pass through the Strait of Hormuz, a blockade of Iran’s ports, and reportedly mine-clearance operations.

Nothing on the battlefield has fundamentally changed. And we shouldn’t expect this war to be over soon.

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Operation Epic Fury

• Negotiations in Islamabad failed to produce a permanent ceasefire (NPR)

• Trump, angry over Iran’s continued blockade of the Strait of Hormuz, orders U.S. Navy to *checks notes* blockade the Strait of Hormuz… (AP)

• U.K. PM Starmer discusses military options for Strait of Hormuz with POTUS but refuses to join blockade action (BBC)

• Two U.S. naval ships ‘transited’ Strait of Hormuz for mine-clearing (AlJ)

• Navy to use underwater drones to help clear Iranian mines from Strait (DS)

• Oil prices surge back over $100 after U.S.-Iran peace talks fail (CNBC)

• Pakistan sends military force to Saudi Arabia as part of pact (BBG)

News Headlines

• Ukraine reports Russia violated Putin’s 32-hour ceasefire, 469 times (TG)

• Hungary’s Trump-backed, Putin-aligned, far-right autocrat Viktor Orban concedes defeat in election to center-right Peter Magyar (AlJ)

• Trump pumps Palantir stock on Truth Social (WSJ)

• Trump attacks Pope Leo XIV, calls him ‘weak’ and ‘terrible’ for speaking against Iran war (WSJ)

Quantum Tech

• The CIA claimed it used revolutionary quantum sensing tool to locate downed pilot; scientists say it was just a PSYOP (CT)

• Strange quantum effect could power future electronics without batteries (STD)

• New, proof-of-concept quantum battery can charge, store, and release energy (STD)

• Researchers develop new method for tracking data loss in QC systems (SD)

AI / ML

• Outpaced by the U.S., China’s military places selective bets on AI--like illuminating blinds spots during air defense engagements and testing drone swarms, (DN)

• Anthropic and the Pentagon are 1-1 in court rulings (POL)

• Pentagon’s ouster of Anthropic opens doors for small AI rivals (RT)

• Even as the Pentagon wants to bar Anthropic from government systems, the intelligence community wants Anthropic‘s new Project Glasswing (DO)

• Investors press Big Tech giants on water and power use in data centers (RT)

• Army debuts data operations center to serve as information hub (MT)

• OpenAI, Anthropic, and Google united to combat Chinese copycats (BBG)

• Anthropic overtook OpenAI in revenue metrics (BBG)

• Anthropic won’t release latest model due to how powerful it is (NYT)

• Musk is seeking to remove OpenAI CEO Sam Altman ahead of trial (BBG)

• Musk requested all $150B lawsuit damages go to OpenAI‘s nonprofit (WSJ)

• OpenAI urged states to investigate Musk’s ‘anti-competitive behavior’ (RT)

• Meta unveiled its first AI model under new superintelligence team (BBG)

• Sam Altman is pissed and losing sleep after Molotov cocktail attack on his home (TC)

Semiconductors / Chips

• Intel joined Musk’s Terafab AI chip project (TC)

• Amazon is considering selling Its AI chips to other companies (BBG)

• Anthropic is weighing building its own AI chips (RT)

• Intel and Google will double down on AI CPUs in expanded partnership (RT)

• Broadcom lands long-term deal to develop Google‘s custom AI chips (CNBC)

Extended, Augmented, Virtual, and Mixed Reality

• XR enhances operator awareness in off-highway machinery (TT)

• Nokia pursues ‘materiality’ as the next frontier of extended reality (NK)

Deal Flow

Funds

• Anthropic is in talks to raise $800M for a $1B PE consulting JV from General Atlantic, Blackstone, and Hellman & Friedman to sell its Claude tool to PE-backed firms (TFN)

• VC Eclipse raised $1.3B across an early-stage incubation fund and growth fund to focus on physical AI (PU)

• Family offices are ditching VCs for direct AI startup bets (TB)

VC

• Anthropic sold secondary shares at a $350B valuation in a low supply deal as many employees refused to sell (BBG)

• RISC-V chip startup SiFive raised a $400M pre-IPO round at a $3.65B valuation from Atreides, Nvidia, and others (BW)

• AI networking startup Aria Networks raised a $125M Series A from Sutter Hill Ventures, Valor Equity Partners, and others (SA)

• Elorian, an AI research and product lab focused on visual reasoning, raised a $55M seed round at a $300M valuation co-led by Striker Ventures, Menlo Ventures, and Altimeter (PU)

• Q-Factor, an Israeli quantum computing startup, raised a $24M seed round led by NFX and TPY Capital (QI)

PE / M&A / Exits

• Japan approved $4B in additional subsidies to quicken Rapidus Corp.‘s entry into the AI chipmaking space (RT)

• Swiss Terra Quantum will merge with Mountain Lake Acquisition Corp. II at a $3.25B valuation (QI)

• Lithium developer US Elemental will merge with Constellation Acquisition Corp. I at a $575M valuation (BBG)

• Data center operator CloudHQ plans to raise $1.4B in ABSs backed by two Virginia facilities leased to hyperscalers (BBG)

• Canadian AI startup Cohere and German AI startup Aleph Alpha are in talks to merge (RT)

Debt

• PIMCO is in talks with Bank of America to help provide $14B of debt ​financing to build an Oracle data center in Michigan (BBG)

Exciting Opportunities

• U.S. Space Command is looking for potential sources that can train LLMs for space domain awareness missions (SAM)

Editor’s Picks

• New York Times reporters Sheera Frenkel, Paul Mozur, and Adam Satariano explore the AI arms race, its implications, and risks.

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The story is remarkable. An officer evading capture in the Zagros mountains, calling in fire missions against Iranian positions on his emergency radio. The CIA mobilizing its in-country network for a deception operation to confuse the Iranian military and buy more time for the U.S. military to locate and rescue the airman.

But the story also highlights several very concerning trends.

• America has become loss averse—especially to human casualties—only willing to wage ‘clean’ wars. CENTCOM and the wider DoD knew that the American population’s support for the war would drop precipitously if the Iranians captured or killed the F-15E crew. As such, they were willing to lose multiple other aircraft to rescue the airmen. Lost aircraft included:

  • An A-10 Warthog damaged during the rescue of the first airman from the F-15E s…

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It won’t be.

In fact, it may already be unfolding somewhere far less visible: inside hospitals, clinics, and state regulatory bodies.

This week, a relatively obscure medical AI company Doctronic raised $40M in Series B venture funding. What makes the company notable isn’t just the capital. It’s the authority it has.

In the state of Utah, Doctronic’s AI system is legally authorized to practice medicine in limited cases—including renewing prescriptions without a human in the loop.

That’s a step-function change in how society assigns decision authority to machines.

It’s also one of the clearest signals yet that society is beginning to accept AI systems making consequential decisions about human health—decisions that can, in some cases, carry life-or-death implications.

And that has direct implications for defense.

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While no specific target was named, analysts quickly pointed to the Damavand Combined Cycle Power Plant, a nearly 3,000 MW facility supplying a significant share of electricity to the Tehran metropolitan area.

The threat immediate triggered a wave of concern—not just about escalation, but about legality.

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In fact, just about everybody in deep tech has been saying that for the past 3+ years. Venture capital has flooded the sector, crowding out funding for other parts of the startup ecosystem.

The public markets tell a similar story. AI-linked firms now dominate tech indices, increasing capital concentration risks for investors.

The surge of capital has also created a second-order effect: intense competition among venture firms is forcing investors to settle for smaller and smaller ownership stakes in the most promising companies.

A closer look at fundraising announcements from the past week provides a clearer picture of how the AI market is taking shape — and where investors believe the real constraints remain.

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President Trump has demanded Iran’s ‘unconditional surrender’. That outcome is highly unlikely in the near term. Intelligence analysts have been skeptical for some time that a U.S. attack could result in regime change. Instead, the strikes have likely hardened the regime. But does that really matter? It’s hard to say when America’s strategic ends remain opaque and appear to shift with the whims of the President.

Iran’s leaders have now selected Grand Ayatollah Ali Khamenei’s son Mojtaba Khamenei to succeed his late father. The younger Khamenei lost both his father and his wife in the initial attacks on the country last week. Already a hardliner, the attacks have likely reinforced his resolve to continue resisting Trump’s demands.

There is also an operational irony in continuing to target senior leaders immediately upon succession. Doing so makes it nearly impossible for them to surrender—or even negotiate.

More broadly, this approach risks normalizing the targe…

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In case you’ve been EuroMaxxing — disconnecting from the internet and spending your time at cafes this weekend — the United States and Israel launched a massive series of attacks against Iran. Both the U.S. and Israel have characterized the attacks as ‘preemptive’—which is a massive stretch, given U.S. intelligence’s own analysis that Iran wasn’t preparing any sort of attack.

Twenty years ago, a thoughtful debate took place delineating between preemptive wars (the 1967 Six Days War is generally considered the shining example of preemptive combat) and preventive wars, which lack imminent threat but acknowledge the intent of the target.

No one should argue that the Iranian regime was repressive, oppressive, and sought to export militancy and terrorism, globally.

The dismantling of the regime is good for the people of Iran, the region, and the world.

The operation has succeeded in killing Grand Ayatollah Ali Khamenei.

That itself won’t have a huge impact on things, but…

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AI made no contributions to U.S. economic growth in 2025.

That fact alone should dispel the increasingly loud myth that artificial intelligence will somehow rescue America’s balance sheet.

There’s a persistent tech-bro belief that AI will grow the U.S. economy so quickly that we’ll outrun our national debt. In fact, Elon Musk has predicted that AI will end America’s debt crisis by 2028.

This trumpeting has shaped arguments in favor of some really dangerous policies: Trump’s One Big Beautiful Bill, a 50% jump in defense budget requests, intentional dollar devaluation, and inflationary nostalgia for a return to ZIRP.

But the reality is that AI has contributed virtually nothing to economic growth to date and likely won’t for some time.

Instead, we’ve charted a dangerous path.

We are no longer approaching the cliff; we are in the early stages of an economic out-crowding. As interest payments on our debt begin to eclipse major departments of the government, the capital requ…

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AI is a massive consumer of energy and that consumption is only growing.

In 2024, America consumed 540 kWh of electricity per individual for AI and data center uses. That consumption is expected to grow to 1,200 kWh by 2030. Again, that’s a per capita consumption. That means the total consumption in 2024 closer to 183 TWh and we can expect it to grow to 426 TWh over the next four years.

AI and data center electricity consumption is expected to consume up to 10% of all electricity in America.

That’s a huge chunk of the grid.

And it’s set off a storm of legal and political fights. For example, Virginia hosts more data centers than any other state with more than 600 of them, largely concentrated in Northern Virginia. Virginia has seen a number of ballot initiatives and conversations in the state’s General Assembly concerning limiting the number of data centers and—more germane to the conversation—about limiting citizens liability for energy consumption surges from the d…

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Superbowl Sunday is behind us, with the Seattle Seahawks stomping on the New England Patriots in a defense-focused game. Notably, the halftime show—featuring American-born Latin rapper Bad Bunny—was the highest viewed halftime show in history with more than 135 million viewers tuned in.

President Trump backed Turning Point USA’s alternate halftime show—headlined by Kid Rock—which received approximately six million views. Notably, Erika Kirk (wife of assassinated TPUSA founder Charlie Kirk) no-showed to the event.

U.S.-Iranian negotiations in Oman have netted no tangible results, yet. Although, both sides appear optimistic and hopeful that the discussions will continue and will lead to meaningful resolution. To that end, Iran has offered to dilute its fissile uranium in exchange for a full lifting of sanctions—something that we don’t expect the Americans to support.

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AI agents are now interacting on their own version of Reddit. The AI-only social media site called MoltBook—a play on FaceBook—provides a place where autonomous bots can post, comment, and vote, while human users are limited to observing the activity. It has drawn viral attention with hundreds of thousands to millions of AI agents interacting, generating discussions that range from practical tips to bizarre philosophical debates.

However, the platform carries notable risks: many experts caution that the interactions aren’t truly autonomous intelligence but sophisticated mimicry, that untrusted AI-to-AI content can introduce security vulnerabilities and prompt-injection attacks, and that exposing agents to unrestricted networked inputs can jeopardize data privacy, system control, and financial costs for users.

Alright, enough yapping. Let’s get on to the news.

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We’ve got a lot of ground to cover from the weekend.

In case you missed it between the drama at Davos last week, ICE agents killing Alex Pretti in Minneapolis on Saturday, and snowmaggedon ravaging across the United States, the DoD finally released its National Defense Strategy (NDS) on Friday night.

We’ll discuss the NDS later this week.

Mondays are supposed to be about advanced computing, so let’s do that.

We want to talk about four quick topics related to AI, today.

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Welcome back from the long weekend (at least for Americans). In case you missed it, over the weekend, Trump doubled down on his quixotic pursuit of Greenland, threatening new tariffs on any European country that doesn’t support his planned takeover. These tariffs begin at 10% with a June 1 ratchet-up close that will raise them to 25% and target eight countries including:

• Denmark

• Finland

• France

• Germany

• Netherlands

• Norway

• Sweden

• United Kingdom

To make the story even better, in a note to Norway’s Prime Minister Jonas Gahr Støre, Trump blamed the Kingdom of Norway’s failure to force the Nobel committee to award the Peace Prize to Trump for his petulant aggression.

Trump clearly has a sense of entitlement and will use hook, crook, or force to get what he wants. On the topic of tariffs, the President is now threatening 200% tariffs on French wine, if France doesn’t join his ‘Board of Peace’ — which amounts to an attempt at creating a shadow U.N. or at least a shadow U.N. Security Coun…

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Tehran is burning as the government cracks down on protestors, with hundreds dead. President Trump is meeting with his top advisors this week to determine what role he wants the United States to play in Iran, after he threatened to use force against the Iranian regime if they attacked protestors. At the same time, the White House is preparing for meetings with Denmark this week over its desired acquisition of Greenland and issuing ultimatums to Cuba.

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Good morning and welcome back. We hope everyone had a fantastic holiday season and that your 2026 is off to a great start. Below is some of the most important news related to advanced computing that you may have missed over the holidays.

Upcoming Future Force Report Podcast

We’re putting the finishing touches on our latest Future Force Report podcast that will dig into this past weekend’s U.S. attack on Venezuela. We release our podcasts first to our paid subscribers, so you may consider upgrading your subscription now. You don’t want to miss this edition that will explore what the brief operation tells us about the future of warfare and defense technology!

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• Military members - if you are a member of the U.S. military and you contact us from military email address, we’ll upgrade your subscription for as long as you remain in uniform. This applies to all components of the milita…

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Australia suffered its worst mass murder since the 1996 adoption of the successful National Firearms Agreement framework. Antisemitic terrorists and father-son duo Sajid and Naveed Akram recently returned from the Philippines, on what Australian authorities are investigating as a terrorism training trip—potentially with Islamic State’s Abu Sayyaf Group—and opened fired this weekend on Hannukah celebrants.

The pair killed at least 16 and injured more before Syrian-born bystander Ahmed al Ahmed intervened, tackling, disarming, and subduing the elder Akram. In the confrontation, al Ahmed suffered gunshot wounds to his hand and arm. He is in hospital, recovering.

Our hearts break for the people of Australia, and particularly for the Jewish community of Sydney.

The rise of reactionary ideologies in Europe, North America, and elsewhere in the collective ‘west’ have given rise to a resurgence of antisemitism and other ethno-religious and nationalistic discrimination. This …

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The White House released the National Security Strategy on Friday. This NSS should be setting off tons of alarm bells—most notably for Europe.

Despite that, the NSS also highlights three key technologies that it sees as critical to America’s future: AI, quantum computing, and biotech. Unfortunately, that’s really the end of the conversation on strategic technology.

Typically, a strategy document outlines ends, lists available means, and then connects those ends and means through ways. In this case, the applicable end is that U.S. technology and U.S. standards in those three core technologies dominate global technologies, or in the language of the NSS ‘drive the world forward.’

The NSS makes a passing reference to investing in emerging technologies and basic science but, in reality, the numbers don’t add up.

We will admit that the Project Genesis announcement of two weeks ago does outline much of what’s missing from the NSS, so it’s curious that there is no mention of…

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Tensions spike between the U.S. and Venezuela as President Trump prepares to host military advisors and members of the national security council this evening to discuss ‘next steps’. These next steps come after a period of heightened tensions:

• The United States has conducted at least 21 air strikes on alleged Venezuelan narco-trafficking boats

• President Trump cautioned that everyone should treat Venezuelan airspace as ‘closed’

• Secretary of Defense Hegseth formally unveiled Operation Southern Spear, two weeks ago, to combat drug trafficking in the Western Hemisphere

• Venezuelan president Nicolas Maduro is attempting to rally OPEC countries to counter-press the United States

• President Trump announced that Operation Southern Spear would target ground-based Venezuelan-linked drug targets ‘very soon’

Now, if that were not enough, several other factors are complicating our understanding of the situation.

First, Presidents Trump and Maduro talked by phone this weekend. Allegedly, du…

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