In this month’s memo, we recap a record-setting third quarter across public and private markets, explore whether the “AI bubble” narrative holds weight, and highlight the deals, data, and dynamics shaping the final stretch of 2025.
Here’s a preview:
- AI dealmaking hits new highs: OpenAI dominated headlines with multi-billion-dollar partnerships with Nvidia, AMD, Oracle, and Broadcom—collectively adding more than 30 gigawatts of AI compute capacity to its buildout.
- The bubble debate intensifies: Leading investors weighed in on whether the AI boom mirrors past industrial overbuilds. While some warn of “capital destruction,” others point to unprecedented real demand and constrained capacity.
- Public markets stay resilient: Major indices reached all-time highs (Nasdaq +11%, S&P 500 +8%, Dow +5%), yet software stocks lagged amid mixed AI impact perceptions and compressed multiples.
- VC activity surges again: Global venture funding topped $122B for the quarter, the second-highest in 13 quarters, with AI-native labs like Anthropic ($13B), OpenAI ($8B), and xAI ($5B) leading the way.
- M&A and IPOs accelerate: $252B in M&A was announced, the most since 2022, with standout deals from Palo Alto Networks, Thoma Bravo, and Coreweave. Meanwhile, IPOs from Figma and Netskope (a Sapphire portfolio company) helped fuel the busiest listing quarter in years.
- The next wave emerges: From humanoid robotics to AI-powered compliance, Q3 funding trends reveal how capital is broadening beyond core AI infrastructure into applied AI and automation across industries.