The CTO Show Brief: Issue 141

Author

Mehmet Gonullu
October 19, 2025

Welcome to Issue 141 of The CTO Show Brief!

This week marked the physical manifestation of AI capital.

A $40 billion data-center acquisition, AMD’s 6 GW alliance with OpenAI, and sovereign capital mobilization confirmed that the frontier of technology is now determined by control over compute, energy, and materials, not just algorithms.

Meanwhile, the MENA region logged a record $4.5 billion quarter, positioning itself as both a beneficiary and a participant in this realignment. The opportunity for long-horizon investors lies in bridging these markets—matching global AI demand with the MEA’s resource and energy advantage.

Whether you’re one of our 2,782subscribers or a first-time reader—grab your coffee, and let’s dive into what’s shaping tech and venture this week!

 

Global Tech & VC Overview — The Great Hardening

1.      Infrastructure Capital Formation at Scale

The $40 billion acquisition of Aligned Data Centers by a BlackRock-led consortium (Microsoft, Nvidia, xAI, MGX, KIA, Temasek) formalizes AI infrastructure as a national-scale asset class.

Signal → Integration: End-users became equity partners, not tenants. This verticalization merges finance, hardware, and cloud into a single strategic stack.

Capital Implication: Predictable, utility-like returns (10–12% IRR) on assets that also provide asymmetric upside from compute scarcity.

2.     Silicon Wars — From Monopoly to Managed Competition

OpenAI’s 6 GW AMD alliance and custom accelerator pact with Broadcom end Nvidia’s singular dominance.

The market now sustains two pillars plus custom ASICs—a maturing, trillion-dollar supply chain.

Signal → Resilience: Hardware supply diversification reduces systemic fragility.

Capital Implication: Secondary suppliers and cooling/power ecosystems become mid-cap compounding opportunities with strategic acquirers already in queue.

3.    Capital Polarization — AI Gravity vs. Specialist Conviction

Two distinct funding realities are forming:

·       Horizontal AI: HealthTech (Sage Care $20M), Enterprise SaaS (Reducto $75M), HR (Viven $35M).

·       Vertical Deep Tech: Biotech megadeals (Kailera $600M, Tubulis $361M).

Signal → Bifurcation: Generalists chase AI adjacency; specialists double-down on domain conviction.

Capital Implication: Startups must self-select their capital lane early—velocity vs. patience cannot coexist in the same cap table.

MEA Region — Sophisticated Capital Formation

1.      Record-Breaking Quarter

MENA startups raised $4.5 billion across 180 deals (+523% QoQ), led by Saudi Arabia ($3.2B) and UAE ($1.2B). Fintech accounted for $3B, with Tamara’s $2.4B facility and Hala’s $157M B-round.

Signal → Sovereign Alignment: Funding correlates tightly with state digitalization agendas; capital is long-dated and mission-driven.

2.     Cross-Border Capital Flow

Foreign investors now exceed local participation.

·       MGX (UAE) co-invested in the U.S. AI infrastructure consortium.

·       Launch Africa Ventures led REasy ($1.8M) and Kuunda ($7.5M).

·       European VCs entered Turkish fintech (Midas $80M).

Capital Implication: The region has achieved signal credibility—LPs view MENA allocations as diversification, not frontier risk.

3.    Vertical Deepening

LegalTech: Oqood ($1M seed) – GCC workflow digitization, early mover advantage.

Clean Energy + AI: Rana Energy ($3M) – Virtual Solar Network, distributed compute power base.

Cross-Border Payments: REasy ($1.8M) – Compliance and inclusivity for SME trade.

B2B Lending Infrastructure: Kuunda ($7.5M) – Expanding lending-as-a-service across Africa to MENA.

Signal → Maturation: The shift from consumer fintech to B2B infrastructure mirrors patterns seen in Southeast Asia (2018–2021).

Bridge Opportunities — Cross-Regional Arbitrage

1.      AI Infrastructure x Clean Energy

Global: Data-center build-outs yield around 12% IRR.

MEA: Renewable-abundant markets (UAE, Saudi, North Africa) can host green compute at lower cost.

Bridge Play: Pair MGX-style sovereign capital with startups like Rana Energy to deliver distributed power for AI workloads.

Expected Return: 20–25% IRR with sovereign-credit protection.

2.     Fintech Infrastructure x AI Workflows

Global: Enterprise AI “digital twins” (Viven $35M) redefine workforce productivity.

MEA: Chari ($12M) with a banking license becomes the merchant super-app foundation.

Bridge Play: Embed AI underwriting and knowledge agents into merchant ecosystems—monetize data and credit distribution.

Upside: Lower CAC and higher LTV compared to Western neobanks.

3.    Supply Chain Security x Critical Minerals

Global: 15–30% “security premium” for non-China sourcing.

MEA: Geographic midpoint and resource richness create natural advantages.

Bridge Play: Joint ventures between Western OEMs and MEA miners to monetize premium-priced offtake contracts.

Capital Profile: Infrastructure yields plus commodity upside.

Operator Edge — From Tactics to Strategy

Tactical (6–12 Months)

·       Compute Proximity: Secure early capacity near new GCC data-center zones; latency is the new logistics.

·       Compliance as Feature: Add DSA-style user-control modes now—early adopters will convert policy risk into trust equity.

·       Arabic LLM Stack: Build retrieval and speech models with verifiable training data for GCC tenders.

 

Strategic (2–5 Years)

·       Own the Power Layer: AI value creation is capex-bound. Energy and cooling infrastructure outperform software multiples by stability.

·       Bridge Fund Vehicle: Structure hybrid funds linking global AI demand to MEA energy and infrastructure supply—yield downside, venture upside.

·       Geographic Arbitrage: As capital concentrates in U.S. AI mega-projects, MEA offers margin expansion through lower energy cost and regulatory green credits.

Market Timing Indicators

1.      Infrastructure M&A Cascade: Next targets include power and cooling vendors; any Vertiv-scale takeover confirms phase two.

2.     Sovereign Deployment: Track MGX and PIF allocations into compute campuses and battery storage.

3.    DSA Spillover: Watch if the Dutch precedent spreads to EU or U.S.—user-agency tech becomes a theme investment.

4.    MEA Follow-Through: Q4 data will show if Q3’s record was structural or debt-inflated.

Conclusion — Slow Capital, Deep Signal

The narrative is no longer about code—it’s about control of the substrate that allows intelligence to exist: compute, power, minerals, and sovereign capital.

Global allocators are converging on industrial-grade AI infrastructure while MENA capital demonstrates readiness to co-own the foundation. The bridge opportunity is clear: patient investors who connect energy surplus to compute demand will own the next compounding frontier.

In the new order of technology, bits require atoms—and those who control the atoms, control the future.

 🎙️Episodes Recap:

 

In this episode, Mehmet sits down with Sebastian Gierlinger VP of Engineering at Storyblok, to explore what it really takes to build software and teams that stand the test of time. From composable architectures to developer-first design, Sebastian shares practical wisdom for engineering leaders navigating complexity, scalability, and AI adoption.

 

In this episode of The CTO Show with Mehmet, host Mehmet Gonullu sits down with Eckhard Jann — former commercial pilot, safety manager, author of Error One, and host of the Error One podcast — to explore how lessons from aviation safety can transform leadership, culture, and decision-making in startups.

 

In this episode, Mehmet sits down with Federico Ramallo , founder of Density Labs and Prevetted AI, to explore how technology, culture, and human connection intersect in building world-class engineering teams.

 

 🎙 Sponsor This Newsletter & Podcast

Reach founders, tech leaders, and investors across MENA and beyond through this newsletter and The CTO Show with Mehmet. Let's Talk

 

📖 From Nowhere to Next

Every week I share startup lessons and stories through The CTO Show Brief. But if you want to go deeper, my book From Nowhere to Next brings together the experiences and insights that shaped my own journey.

Thanks for reading — and for being part of this growing, global-minded network.

 — Mehmet