Good day. Political headwinds facing vaccines are intensifying, but not all investors and entrepreneurs in the sector are losing conviction.

The U.S. this week dropped universal recommendations for certain childhood vaccines, the latest in a series of moves by the Trump administration that have sowed uncertainty.

Last year, for example, Health and Human Services Secretary Robert F. Kennedy Jr. ousted all members of a federal panel, the Advisory Committee on Immunization Practices, that recommends vaccines. Their replacements include members with a history of vaccine skepticism.

Since the pandemic, vaccines’ allure has faded with many investors. A survey of public and private investors in December by investment bank William Blair found that infectious diseases and vaccines were at the bottom of the list of favored biotech sectors and products.

One reason is that there are fewer acquirers for vaccine developers than there are for biotechs in hot markets such as inflammatory and immunological diseases, said Kevin Eisele, a William Blair managing director, equity capital markets. The regulatory situation has made vaccines even less attractive, he added.

Glenn Rockman, managing partner of Adjuvant Capital, which has funded several vaccine companies, said his firm isn’t backing away. He remains confident that vaccines that are proven to be safe and effective will find an audience.

“We deeply believe in the importance of innovations in the vaccines space,” Rockman said.

And now on to the news...

Fundraising for U.S. venture-capital firms dropped 35% in 2025. That marks the most anemic stretch in at least six years, with money flowing primarily to the most trusted investment firms as companies stay private longer. The $66 billion raised last year represents a 70% drop from the 2022 record, according to new data from research firm PitchBook.

xAI, Elon Musk’s artificial intelligence company, completed a $20 billion Series E funding round, surpassing its $15 billion target. The company behind the Grok large language model said Tuesday that investors in the funding round included the Qatar Investment Authority, Valor Equity Partners, Stepstone Group, MGX, Baron Capital Group and Fidelity Management & Research Company. xAI also listed Nvidia and Cisco Investments as strategic investors in the round.

A Bill Gates-backed nuclear fusion company has teamed up with tech giants Nvidia and Siemens in an effort to bring the energy that powers the sun a step closer to commercial reality.

• Commonwealth Fusion Systems is working with the tech companies to develop a virtual replica of CFS’s nuclear fusion machine, courtesy of Nvidia’s and Siemens’s AI and industrial software might. Fusion engineers will use this “digital twin” to run simulations, ultimately to hasten the goal of producing fusion energy at a commercial scale.

Data

Venture investments in climate tech rose to $40.5 billion last year globally, up 8% compared with the 2024 total of $37.4 billion, according to research firm Sightline Climate that tracked deals through Dec. 11. Last year’s funding levels are still below 2023 totals. AI deployment increased demand for investments in energy-efficient data centers, nuclear energy, grid flexibility and backup power technologies, according to Sightline. At the same time, funding for technologies that avoid or remove carbon emissions dropped 24%, the data showed. The number of climate tech deals declined 18%, with capital concentrating into fewer, later-stage bets, per Sightline. That’s a phenomenon seen in other venture-capital sectors.

—Yuliya Chernova

Exits

Semiconductor solutions company Marvell Technology agreed to acquire XConn Technologies, a developer of PCIe and CXL switching silicon products, for about $540 million in cash and stock.

LMArena, a San Francisco-headquartered community-driven platform for AI benchmarking, added $150 million in new funding at a post-money valuation of $1.7 billion. Felicis and UC Investments led the round, which included participation from Andreessen Horowitz, Kleiner Perkins, Lightspeed Venture Partners and others.

Photonic, a Vancouver-based distributed quantum computing startup, raised $130 million in the first close of its latest funding round. Planet First Partners led the investment, with Managing Partner Nathan Medlock joining the company’s board.

Cambium, a startup developing advanced materials for defense, aerospace and other sectors, secured $100 million in Series B funding. Led by 8VC, the round included additional support from MVP Ventures, Lockheed Martin Ventures and others.

Swap, a London-headquartered agentic commerce operating system provider, scored a $100 million Series C round co-led by DST Global and Iconiq.

Qualinx, a semiconductor company headquartered in The Netherlands, collected a €20 million investment led by Invest‑NL.

• The Fight Over Making Data Centers Power Down to Avoid Blackouts
   
• How Judges Are Using AI to Help Decide Your Legal Dispute
   
• Meta Pauses European Rollout of Smart Ray-Bans as Americans Lap Up Supply
   
• Nvidia CEO Says He Doesn’t Care About California’s Proposed Billionaire Tax
   
• OneStream to Go Private Through $6.4 Billion Hg Acquisition
   
• Memory Stocks Surge as Shortage Is Expected to Worsen
   
• Morgan Stanley Plans to Launch Bitcoin and Solana ETFs

• Mobileye to Buy Humanoid Robot Maker Mentee for $900 Million (Bloomberg)
   
• The day the cloud went out (Rest of World)

This newsletter was compiled by Yuliya Chernova, Zachary Cole and Matthew Strozier. 

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

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