The CTO Show Brief: Issue 144

Author

Mehmet Gonullu
November 09, 2025

Welcome to Issue 144 of The CTO Show Brief!

 Public markets are wrestling with AI valuation anxiety and short-term monetization concerns, while the world’s most strategic capital allocators are quietly accelerating investment into the next era of compute, data infrastructure, and sovereign technology. AWS and OpenAI announced a $38B compute alliance, Microsoft deepened its AI commitment to the UAE with a $15.2B program tied to national capability building, and quantum computing entered the public markets with real commercial traction. At the same time, MENA and Africa funding showed resilience and maturity through disciplined deployment, debt-supported expansion, and new fund formation focused on AI, fintech, and regulated industries. Capital is becoming more selective, but conviction capital is still moving toward long-term value creation rather than sentiment cycles.

 Whether you’re one of our 2,815 subscribers or a first-time reader—grab your coffee, and let’s dive into what’s shaping tech and venture this week!

MEA Tech & VC Roundup

Regional Funding Overviews

Startup Funding Rounds

VC Fund Launches & Closures

Major Investments & Strategic Moves

Launches & Events

 

Global Tech & VC Pulse

While public markets spiraled over "AI bubble" fears and Nvidia shorts, the real money was doing something entirely different: pouring foundation for the next 50 years of computing. AWS and OpenAI locked in a $38 billion compute pact, Microsoft dropped $15.2 billion on UAE sovereign AI, and quantum computing got its first $3.6 billion public pure-play—all in the same week a widely-cited MIT report claimed 95% of enterprise GenAI investments have yielded "zero return." Welcome to the cognitive dissonance economy.

The $38B Handshake: OpenAI Diversifies Away From Microsoft

The biggest story this week is what it signals, not just what it costs. OpenAI inked a multi-year, $38 billion infrastructure deal with AWS—Microsoft's chief cloud rival—to access "hundreds of thousands" of NVIDIA GPUs via Amazon EC2 UltraServers. Full deployment targets end of 2026.

This isn't a customer-vendor relationship. It's OpenAI declaring strategic independence. When you're chasing AGI, your existential risk post-breakthrough is compute scarcity. OpenAI has grown too large to bet everything on Microsoft, even as a close partner. The company is now "spreading its $600B cloud AI bet across AWS, Oracle, Microsoft"—classic supply-chain diversification that also creates massive pricing leverage.

Microsoft's $15.2B UAE Deal Is Foreign Policy Disguised as Cloud

Microsoft's $15.2 billion total investment package in the UAE—including a $1.5 billion equity stake in G42—comes with something unprecedented: a "binding framework" called the Intergovernmental Assurance Agreement (IGAA), developed with the U.S. and UAE governments.

This agreement is why Microsoft secured U.S. Commerce Department export licenses to ship the most advanced Nvidia GPUs, including the GB300, to the UAE. The spending plan: $4.6 billion in datacenter capex by end of 2025, another $7.9 billion by 2029.

This is the definitive blueprint for "Sovereign AI" as an extension of U.S. foreign policy. The UAE gets best-in-class AI infrastructure and becomes a global AI hub. The U.S. gets a key ally locked into American tech standards, effectively blocking Chinese influence. The UAE already leads in per-capita GenAI usage—now it has the infrastructure to match.

Google Fires Back: The TPU Counter-Offensive

Google launched its most aggressive hardware play yet with "Ironwood," its 7th-gen TPU, claiming 10x the peak performance of TPU v5p and 4x per-chip performance versus its predecessor Trillium. Simultaneously, it launched "Axion," a new Arm-based CPU offering "up to 2x better price-performance" than x86-based VMs.

The validation: Anthropic is deploying "up to 1 million TPUs" to train and serve Claude models.

This is Google weaponizing full-stack integration to create a viable non-Nvidia ecosystem. While Nvidia sells components (chips + CUDA software), Google is selling an integrated "AI Hypercomputer"—run your entire AI workflow on custom silicon, cheaper and more efficient, all in one place.

Just like OpenAI diversifying away from Microsoft, Anthropic is diversifying away from 100% Nvidia dependency. The hardware market is bifurcating: War Front 1 is merchant silicon (Nvidia vs. AMD). War Front 2 is integrated cloud ecosystems (Google/TPU vs. Amazon/Trainium vs. Microsoft/Cobalt). Google's Anthropic win is a major escalation on Front 2.

The Nvidia Question: $5T Moat or Systemic Risk?

Nvidia briefly topped $5 trillion in market cap this week and now accounts for roughly 8% of the S&P 500 alone. Michael Burry ("The Big Short") has taken a significant short position against the company.

Nvidia's value is no longer just chip sales—it's a proxy for the entire AI boom. When one company is 8% of the S&P, its fate is the market's fate. Burry's bet isn't just on P/E ratios; it's that this systemic concentration is unsustainable.

The "bubble" fears consuming markets are almost entirely conflated with Nvidia. The AWS/OpenAI and Google/Anthropic deals aren't just competitive moves—they're necessary market de-risking from profound dependency on a single company.

The 95% Problem: Where's the Enterprise ROI?

A widely-cited MIT report from August 2025 provided the ammunition bears needed: 95% of organizations are getting "zero return" from their share of $30-40 billion in enterprise GenAI investment. The report claims companies are "burning billions to make millions."

This data point explains the AI stock pullback and extreme valuation scrutiny (Palantir trading at 700x forward earnings). If enterprise customers aren't seeing ROI, they'll stop buying, collapsing the valuation pyramid.

For the past 18 months, enterprise AI adoption was driven by FOMO. This report marks the official "Trough of Disillusionment." Every startup pitching GenAI now faces CFOs armed with this statistic. Demos of "magic" aren't enough anymore—you need a quantifiable, CFO-ready business case that proves you'll move the needle on revenue, cost, or compliance.

Shadow AI: The Enterprise's $0 Budget Line

While struggling to measure official AI ROI, companies face a new liability: a 2025 KPMG study found 44% of employees have used AI against company policy. Employees are pasting sensitive data—contracts, client info, proprietary code—into public tools like ChatGPT, creating massive security and compliance vulnerabilities.

This has created demand for "standalone secured AI" workspaces like the newly-launched pipIQ, offering ChatGPT-like experiences within secure firewalls (HIPAA, SOC 2, GDPR-compliant).

This is the toxic byproduct of the ROI gap: employees know AI makes them productive even if enterprises can't measure it. In the absence of sanctioned tools, they create workarounds that expose firms to massive risk.

Corporate leadership faces a two-pronged crisis: (1) no measurable return from official AI investments, (2) massive unmeasured risk from unofficial employee AI use. This is a gold-rush moment for AI Governance & Security startups.

Quantum's Commercial Leap: China Ships, West Goes Public

Quantum computing made a definitive leap into the commercial mainstream this week through two events that bifurcate the global race.

China's Hanyuan No. 1: China's first commercial neutral-atom quantum computer (100-qubit, developed by Chinese Academy of Sciences) has already secured $5.6 million in commercial orders. Key differentiator: room-temperature operation without massive cryogenic infrastructure, fitting in three server racks and consuming 10x less energy than comparable systems.

This is classic "good enough" disruption. While the West pursues perfect, fault-tolerant, cryo-cooled qubits, China is shipping a practical product solving specific application problems (financial modeling, logistics) today. Sputnik moment for quantum.

Xanadu's $3.6B SPAC: Canadian quantum company Xanadu announced SPAC merger with Crane Harbor Acquisition Corp. (Nasdaq: CHAC), creating the "first publicly traded pure-play photonic quantum computing company." Deal values combined company at $3.6 billion pro forma market cap, with $500 million gross proceeds including a $275 million oversubscribed PIPE.

Critical detail: AMD participated in the PIPE, providing strategic validation. Public markets now have investable proxies for three quantum modalities: annealing (D-Wave), ion-trap (IonQ), and photonics (Xanadu). This sets a high-water benchmark for all deep-tech quantum startups and unlocks VC capital to build portfolios across competing approaches.

Supporting signals: D-Wave reported Q3 2025 revenue doubling YoY. New partnership between SkyWater Technology and QuamCore to fabricate superconducting controllers (SFQ devices) for 1-million-qubit systems. DARPA's Quantum Benchmarking Initiative advancing.

The ecosystem is maturing. VCs can now fund the "Nvidia of Quantum" (controller chips), the "TSMC of Quantum" (foundries like SkyWater), or the quantum benchmarking layer—not just high-risk qubit-makers.

Exit Market: BETA's $1B IPO Validates Deep Tech

BETA Technologies IPO: Vermont-based eVTOL maker priced IPO at $34/share (above expected range) to raise $1.01 billion, closing Day 1 with $7.4 billion valuation (NYSE: BETA).

This is a bellwether for the entire deep tech/hard tech sector. For years, eVTOL was dominated by volatile SPACs. BETA's successful traditional IPO proves public markets will underwrite highly capital-intensive, pre-commercialization hardware companies (FAA certification still 30 months out) with strong strategic backing (investors include Amazon and GE).

Ripple's $40B Wall Street Round: Ripple Labs raised $500M at $40B valuation, led by Citadel Securities and Fortress Investment Group—not crypto-native VCs, but Wall Street giants. Other participants: Pantera, Galaxy Digital, Brevan Howard.

This is fundamentally a TradFi infrastructure deal. After battling the SEC, Ripple has transformed from "disruptor" to "enabler" for existing financial systems (launching RLUSD stablecoin, partnering with Mastercard for settlements).

Metropolis's $5B Real-World AI Play: $500M Series D for AI-powered checkout-free parking platform at $5B valuation, part of larger $1.6B financing including $1.1B debt from JP Morgan.

The $1.1B debt is the tell: you don't take that much debt to write code—you take it to finance hard assets (cameras, sensors, gates for thousands of garages). This is a massive IoT play disguised as AI. The valuation is for full-stack integration of physical-world sensor networks and the AI brain running it. Model for real-world AI value creation: the ultimate value is owning the proprietary data stream from proprietary physical infrastructure.

Strategic M&A: Two Clear Exit Paths

Intuit Mailchimp acquired Raleon, an AI-first Web3/MarTech startup. Raleon's team was building AI for "hundreds" of brands; at Intuit, they'll apply expertise to Mailchimp's "more than 1 million brands." Classic talent-and-tech acquisition—large platform acquiring sharp AI-native team to accelerate its roadmap.

Macy's Media Network integrated Amazon's Retail Ad Service, becoming the first major department store to adopt Amazon's ad-tech platform. Amazon is "AWS-ifying" its internal tools—platformizing world-class advertising tech and selling it B2B, even to retail competitors.

Two clear endgame paths for many startups: Path 1: Build sharp AI-native team/product and get acquired by platform. Path 2: Partner with platforms unbundling internal tools as B2B services.

The Bottom Line

This week perfectly captured the split-screen reality of 2025 tech markets. Public investors are panicking over near-term ROI and bubble fears. Strategic capital—Big Tech, sovereign wealth, nation-states—is playing a completely different game with multi-decade timelines.

The $53+ billion in infrastructure commitments announced this week (AWS/OpenAI + Microsoft/UAE) aren't rational short-term bets. They're the railroads of the AI age. The "bubble" is painful but necessary—it's how you finance cathedrals that take 20 years to pay off.

For founders and VCs: distinguish signal from noise. The 95% "zero return" statistic is your new reality—lead with quantifiable ROI or die. But don't mistake public market froth for the absence of opportunity. The companies building picks and shovels, securing sovereign partnerships, and owning real-world data infrastructure are quietly building the next trillion-dollar opportunities while everyone else watches Nvidia's stock price.

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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