Venture capital might have a concentration problem.
The big picture: VC funds have invested hundreds of billions of dollars into a small group of frontier AI labs. – OpenAI and Anthropic alone received over 60% of all VC dollars committed to U.S. startups in the first half of 2026, according to PitchBook. – The promise to limited partners has been cash-on-cash returns — it’s about the “access,” not the “picking” — after years of diminished distributions
Mega-IPOs on the horizon. Zoom in: The easy ROI narrative is under pressure from a sudden U.S. tech industry affinity for open-source models, or at least open-weight models, which threatens OpenAI and Anthropic’s market dominance. – The first major crack came two weeks ago, after China’s Moonshot AI released its powerful (and cheaper) Kimi K3 model. – The next was Nvidia CEO Jensen Huang telling Axios that “open-source models that are excellent should be used,” which he followed by signing a public letter in support of open-weight models. Other signatories included Microsoft, Meta and Andreessen Horowitz — all of which likely see open-source as demand drivers. – OpenAI and Anthropic have pushed back, arguing that open-source could prove dangerous, only to be attacked on social media as advocates for regulatory capture.
Market reax: Then there is SpaceX, whose AI story is getting an increasingly dour reception from Wall Street. – The company’s stock closed Friday down 49% from its all-time intraday high, 23% below its first trades, and 15% below its IPO price. And shares opened even lower Monday. – SpaceX is a momentum comp for OpenAI and Anthropic, and right now it’s moving in the wrong direction. Flashback: Hugging Face CEO Clem Delangue, whose company was recently attacked by an OpenAI agent, said last year at Axios BFD that the U.S. tech industry was sleeping on Chinese open-source models and that the “LLM bubble” was close to bursting.