Good day. Venture capital invested in artificial intelligence is already approaching the total amount of cash deployed over the entire dot-com era.

In inflation-adjusted dollars, total global investment in venture-backed AI startups since 2022 has reached $560 billion, nearly 90% of total deployment between 1995 and 2002, according to a new report from Silicon Valley Bank, a division of First Citizens Bank. Should investment trends hold, totals are likely to surpass the dot-com era this quarter.

Capital concentration has accelerated, with about a third of AI investment going to just five companies: OpenAI, Anthropic, Databricks, Scale AI and xAI, which has just been acquired by SpaceX.

"For every mega-round or for every huge Series B financing that gets done at a $1 billion [valuation] pre-revenue, there are 500 companies behind it that are struggling to raise at three times" annual revenue, commented Sam Jones, a partner at Torch Capital.

Capital concentration in the top 1% of startups by valuation has more than doubled over the past three years, reaching 33% last year from 12% in 2022, Silicon Valley Bank said. At the same time, companies in the bottom half by valuation have seen their share of investment shrink to 7% from 9% over the same period.

The effect has been more startups struggling to reach the next valuation round and expectations for revenue growth increasing despite the massive amounts of cash

"The reality for the vast majority of the market outside of pure AI plays is that the bar for getting a seed done is very high,” Jones said.

And now on to the news...

SpaceX, xAI tie up, forming $1.25 trillion company. Elon Musk said SpaceX acquired xAI, a deal that combines his powerful rocket-and-satellite business with his artificial-intelligence startup that is facing steep competition. SpaceX confirmed the deal Monday, posting a memo Musk sent out about the arrangement on its website. The combination brings together a mature and dominant company in SpaceX, with one that is in a nascent stage.

Several European investors have backed an $85 million growth investment in nuclear-energy startup Newcleo, which is developing a small modular reactor that runs on recycled fuel rods. The deal includes asset manager Azimut Group in Milan, the pension fund of Europe’s nuclear-research lab CERN and several Italian industrial companies. Italian investment firms Kairos Partners SGR and Indaco Ventures also backed the deal. Paris-based Newcleo aims to expand into the U.S. The company last year signed an agreement with Oklo, a Santa Clara, Calif.-based developer of small modular reactors backed by OpenAI founder Sam Altman, to invest as much as $2 billion in nuclear-fuel reprocessing infrastructure in the U.S. 

Chicago asset manager Ariel Investments has closed one of the largest funds ever dedicated exclusively to women’s sports and plans to acquire stakes in teams and leagues in the U.S. and Europe. Ariel’s Project Level Fund raised an initial $250 million at its first close, and plans to continue raising more capital, said Mellody Hobson, Ariel Investments’ co-chief executive and president. The firm declined to disclose how much it ultimately aims to raise for the fund. The fund will back professional women’s teams and leagues, youth sports, and businesses critical to women athletes across North America and Europe, she said. 

People

Anna Barber joined Everywhere Ventures as a general partner. She will continue at M13 as a board partner.

CesiumAstro, a Bee Cave, Texas-based provider of advanced connectivity solutions for space and defense, landed $470 million in growth capital, including $270 million in equity. Trousdale Ventures led the equity portion, which included participation from Woven Capital, Janus Henderson Investors, Airbus Ventures and others.

Fieldguide, a San Francisco-headquartered agentic AI-native platform for audit and advisory firms, scored $75 million in Series C funding. The growth equity business within Goldman Sachs Alternatives led the round, which included participation from Geodesic, Bessemer Venture Partners, 8VC and Thomson Reuters.

RapidFort, a Sunnyvale, Calif.-based software supply chain security platform, collected a $42 million Series A round led by Blue Cloud Ventures and Forgepoint Capital.

Mitra EV, a Los Angeles-based commercial fleet electrification platform, grabbed $27 million in equity and debt funding. Ultra Capital led the equity portion.

Kasada, a Sydney-based startup helping enterprises defend against malicious automation and AI-driven abuse, snagged $20 million in funding from investors including EQT, Ten Eleven Ventures and Main Sequence Ventures. 

Linq, a Birmingham, Ala.-based startup building a communication layer for AI agents, nabbed $20 million in Series A funding from investors including TQ Ventures and Mucker Capital.

Plug, a Santa Monica, Calif.-based marketplace for buying and selling electric vehicles, secured $20 million in Series A funding. Lightspeed Venture Partners led the round, which included contributions from Autotech Ventures, Leap Forward Ventures and others. Justin Overdorff, partner at Lightspeed, joined the company’s board.

GoCab, a London-headquartered startup helping to provide ethical financing and vehicle ownership for gig-economy workers across Africa, closed a $45 million financing round. The investment consisted of $15 million in equity led by E3 Capital and Janngo Capital.

Loop AI, a San Francisco-based AI platform for restaurant and retail back office tasks, raised $14 million in Series A funding. Nyca Partners led the investment, which saw participation from Base10 Partners, Afore Capital, Alumni Ventures and others. Osama Bedier, investment partner at Nyca Partners, will join Loop AI’s board.

Incard, a London-based startup building a financial operating system for digital entrepreneurs, fetched £10 million in Series A funding. Led by Smartfin, the round included contributions from Founders Capital and MountFund.

Ditto, a Berkeley, Calif.-based college online dating planner, was seeded with a $9.2 investment. Peak XV Partners led the funding, which included additional support from Gradient, Scribble Ventures and others.

Derapi, a startup building software infrastructure for the distributed energy ecosystem, was seeded with a $7 million investment led by Earthshot Ventures. The company is headquartered in San Francisco and Jackson, Wyo.

Arbor, a New York-headquartered AI research platform for enterprise operations, obtained $6.3 million in combined seed and pre-seed funding from investors including 645 Ventures.

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This newsletter was compiled by Matthew Strozier and Zachary Cole.

Share your tips, comments and questions: vcnews@wsj.com

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

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