Irrational Exuberance vs. Realistic Optimism

Wars in Iran and Ukraine are not ending.

May 11, 2026

President Trump seems surprised that Iran has countered his proposal. The markets are also surprised because they seem unable to find the signal in the noise.

Here’s a hint, what the president says is NOT the signal. That’s often part of the noise.

Russian president Putin seems to have taken a page from Trump’s script and is now claiming that he believes his military adventure in Ukraine is drawing to a close.

Just like the U.S.-Iran war hasn’t achieved any strategic objectives and is thus not coming to a close, neither Russia nor Ukraine have achieved their strategic objectives. So, it’s highly unlikely that war is coming to a close, either.

It’s irrational exuberance rather than realistic optimism. It’s a failure to understand the Stockdale paradox.

Operation Epic Fury

Trump rejects Iran’s response to end of war proposal (AX)
U.S. Iran hawks thought it was a bad deal for America, Israel, anyway (TH)
U.S. forces disable Iranian-flagged tankers trying to run blockade (MT)
Iran’s Supreme Leader briefs military chief on ‘new guiding ‘measures’: Fars agency (RT)
Kuwait’s army intercepts ‘hostile’ drones over airspace (RT)
S. Korea confirms strike on vessel in Hormuz before Pentagon talks (BBG)

News Headlines

Trump to meet with Chinese premier Xi (TH)
Russia-Ukrainian 3-day ceasefire falls apart (KP)
Putin says he thinks Russia-Ukraine war is coming to an end (RT)
Sen. Mark Kelly (D-AZ) blasts Pentagon’s $1.5T budget as ‘outrageous’ (CBS)

Quantum Tech

Harvard researchers: QC is advancing faster than expected (QI)
Japanese physicists discover new ‘anyon’ quantum particle (SD)
Time-varying magnetic fields can engineer exotic quantum matter (PHYS)
Scientist just sent unhackable quantum keys across 120 km (SD)
Military prepares F-35s for QC threats (DB)

AI / ML

Pentagon turns to AI targeting to help troops shoot down drones (MT)
Pentagon hands Meta-backed Scale AI $500M contract, 5x last year’s deal (FBS)
DoD’s cyber policy chief sees ‘huge opportunity’ with frontier AI models (DS)
Undersecretary for Research & Engineering: Pentagon will ‘never again’ rely on a single AI provider (NG)
OpenAI will spend $50B on computing power this year (RT)
Apple will let users choose AI models across iOS 27 features (BBG)
Anthropic signed a computing deal with SpaceX (BBG)

Semiconductors / Chips

Anthropic will spend $200B on Google’s cloud and chips (RT)
Apple and Intel signed a chips deal (WSJ)

Deal Flow

Funds

University of Michigan‘s endowment is up 100x on its $20M OpenAI bet (BI)

VC

Anthropic is weighing raising the valuation on its $50B raise to a $1T valuation (FT)
Chinese OpenAI-rival DeepSeek is in talks to raise a $7B debut round at a $50B valuation led by China’s state-backed vehicles (TI)
Chinese AI startup Moonshot AI raised a $2B round at a $20B valuation led by Meituan‘s VC arm Long-Z Investment (TC)
Isomorphic Labs, an AI drug discovery startup spun out from Google DeepMind, is set to raise $2B+ in new funding led by Thrive Capital (BBG)
Voice AI startup ElevenLabs raised a $500M Series D at an $11B valuation from BlackRock, D.E. Shaw, Nvidia, Salesforce, Jamie Foxx, and others (TC)
Blitzy, an autonomous software development platform, raised a $200M growth round at a $1.4B valuation led by Northzone (BW)
European quantum processor company QuantWare raised a $180M Series B from Intel Capital, In-Q-Tel, and others (QI)
Quantum Motion, a UK startup building full-stack quantum computers on silicon chips, raised a $160M Series C co-led by DCVC and Kembara (RT)
Panthalassa, a startup developing ocean-based data centers powered by waves, raised a $140M Series B at a $1B valuation led by Peter Thiel (BW)
DeepInfra, a cloud inference platform provider, raised a $107M Series B led by 500 Global and Georges Harik (SA)
Subquadratic, an AI research company developing long-context LLM architectures, raised a $29M seed round from Javier Villamizar, Justin Mateen, and others (SA)
CopilotKit, an enterprise AI agents toolkit and creator of the AG-UI protocol, raised a $27M Series A led by Glilot Capital, NFX, and SignalFire (TC)

PE / M&A / Exits

Musk’s SpaceX plans to invest $55B in Musk’s Terafab AI chip project (BBG)
Blue Owl-owned data center operator Stack Infrastructure is considering a $30B sale of its Asia operations (DCD)
AI chipmaker Cerebras Systems will increase the price of its IPO after receiving over 20x in demand to raise $5B at an over $30B valuation (RT)
Baidu‘s chip unit Kunlunxin is planning a dual IPO in China and Hong Kong at a $15B valuation (MP)
Nvidia will invest $2.1B in $22B-listed data center operator IREN (BBG)
Lattice Semiconductor will acquire firmware company AMI from THL Partners in a $1.65B cash-and-stock deal (RT)
Swedish chip fab Silex Microsystems soars on IPO (BBG)

Editor’s Picks

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