Key points
- Democrats win the House, Senate and Texas, but markets rise as D.A. Wallach credits divided government.
- An NBC exit poll finds 56% of voters call AI and data centers a major factor, and Jason Calacanis warns of an anti-self-driving wave.
- Tomasz Tunguz says Anthropic's S-1 shows 81-82% gross margins, above public software's 71%.
Markets rally as a Democratic sweep brings gridlock
Funding and deals
- General Compute. General Compute closed a Series A. Elana Gold's Two Roads Capital is an investor in the company.
Guest interviews
- Elana Gold, venture investor at Two Roads Capital. She says there is not enough power for AI and cites Elon Musk's warning that the US runs out of power in 2026, pointing to nuclear startups such as Panthalassa. She argues AI wrappers will see margins compressed as customers demand lower prices. She also flags founders offering uncapped SAFEs at a 10% or 15% discount, which leaves investors no price for the next round.
News
- Democrats sweep midterms and markets rally. Democrats took the House and the Senate and swept Texas, yet overnight markets rose instead of correcting 2 to 4 percent. D.A. Wallach says divided government means nothing crazy happens.
- AI and data centers swing voters. An NBC exit poll found 56% of voters called AI and data centers a major factor, and Democrats spent more than $100m tying Republicans to big tech. D.A. Wallach calls data centers a political winner for both parties.
- Self-driving firms brace for political backlash. Jason Calacanis warns an anti-self-driving wave could hit Waymo, Tesla, Zoox and Avride. D.A. Wallach frames the fight as intergenerational, with the Social Security trust fund insolvent in 2032.
- Sequoia restructures with Doug Leone back. Sequoia is closing its London office and sunsetting ARC and its scout program. It is folding early and growth investing back together, with Doug Leone back in the seat and $10bn of new funds.
- Antitrust freeze may give way in 2027. Jason Calacanis says four years of no M&A under Lina Khan may give way to a six-month window in 2027, since DOJ and FTC approvals take about 18 months. Thomas Tunguz says China may block the largest tech deal ever.
- Anthropic margins near 82% as prices fall. Thomas Tunguz says Anthropic's S-1 shows 81 to 82% gross margins against 71% for public software, while OpenAI cut prices 50% then 80%. D.A. Wallach expects fat margins to draw competition and push prices down.
- GPU rental costs jump 120% in six months. Thomas Tunguz says GPU costs rose 120% in six months, from about $5 to $13 an hour, with 81 gigawatts of capacity due next year. He predicts local inference will grow as cloud capacity tightens.
- Canva cuts 22% of staff. Jason Calacanis says Canva cut 22% of staff, about 1,200 people, as software margins come under pressure. He argues much of software will become free and the all-you-can-eat AI model may end.