The CTO Show Brief: Issue 151

Author

Mehmet Gonullu
December 28, 2025

Welcome to Issue 151 of The CTO Show Brief.

This is the final Weekly Signals of 2025. To all readers: thank you for a tuning in.

The Great Bifurcation

The tech economy is splitting in two. On one side, foundational AI infrastructure and sovereign-grade energy are absorbing capital at unprecedented velocity—Alphabet's $4.75B acquisition of Intersect Power and OpenAI's pursuit of an $830B valuation mark a new industrial era. On the other, consumer hardware and application layers are entering sharp recession: smartphone demand has collapsed, gaming engagement is stagnating, and the upgrade cycle is dead. The market is repricing value capture from human consumption of digital goods to machine production of intelligence.

Hyperscalers Become Utilities

Alphabet's acquisition of Intersect Power signals the definitive shift from tech companies as energy consumers to energy producers. The deal's centerpiece—a 640MW solar installation paired with 1.3GW of battery storage in Texas—operates entirely "behind the meter," bypassing the 5-10 year queue for public grid interconnection. Modern AI training clusters demand 100+ kW per rack; the public utility model cannot scale fast enough. For founders building at the infrastructure layer, this validates modular nuclear, advanced geothermal, and high-density battery chemistries as prime acquisition targets. Energy is no longer a cost center—it's the moat.

The Programmable Dollar Era Begins

The GENIUS Act's operational rollout, combined with Visa's expansion of stablecoin settlement to US markets via Solana and Circle's Arc chain, marks the formal end of the "crypto casino" era. Stablecoins now have a federal definition, banks can issue them, and algorithmic variants are effectively banned. The second-order play: these rails are being built for agentic commerce—AI agents transacting autonomously 24/7. Whoever controls the programmable money stack controls the interface between machines and markets. Traditional payments incumbents face a fork: partner with fintechs or face obsolescence.

The $475M Seed Round Kills the Lean Startup

Unconventional AI's nearly half-billion-dollar seed round rewrites the rules of company formation. For tier-one AI talent, the concept of "lean" is dead—competing in the model layer now requires exaflops of compute before finding product-market fit. This bifurcates founders into two classes: those who can raise $500M on a deck (the 0.1%) and everyone else. Meanwhile, Mistral's €11.7B round, backed by Abu Dhabi's MGX, illustrates the new geopolitical math: Europe needs capital, the Gulf needs technology transfer, and both are building an alternative pole to the US-China duopoly.

Consumer Tech Winter Is Here

The smartphone market has hit the "good enough" plateau—three-year-old devices remain fully functional, and on-device AI features have failed to drive upgrades. Factory closures and inventory gluts signal deflationary pressure across the electronics supply chain. Simultaneously, an HBM memory shortage will persist through 2027 as AI accelerator demand cannibalizes consumer-grade DRAM capacity. Hardware startups face margin compression that could break their unit economics; battery manufacturers are pivoting sales from Detroit to Silicon Valley, where data center storage commands urgency premiums.

Identity Is the New Perimeter

A 16-billion-credential mega-leak—aggregated from years of infostealer malware—confirms that passwords are a liability, not a control. Saviynt's $700M Series B validates identity governance as the growth vertical in cybersecurity. For operators: the move to passkeys is no longer optional. Your user database is likely already compromised if you rely on shared secrets.

The structural implication for 2026: aggressive offense on AI infrastructure and digital finance rails; defensive resilience on consumer exposure and cybersecurity. The bifurcation rewards those who choose sides clearly.

🎙️Episodes Recap:

Live events generate massive attention, yet most venues have no idea who is actually attending. In this episode, Mehmet Gonullu sits down with Matt. Zarracina CEO and Co-Founder of True Tickets, to unpack the hidden infrastructure problem behind ticketing, identity, and audience ownership.

Matt shares how legacy ticketing systems optimized for transactions, not relationships, and why “shadow audiences” have become one of the biggest blind spots in live event tech. The conversation spans SaaS innovation in legacy industries, blockchain learnings, AI-driven personalization, and what it truly takes to build mission-critical infrastructure at scale.

AI models are becoming commoditized, but deploying AI systems that deliver real ROI remains hard. In this episode, Mehmet sits down with Bryan Wood , Principal Architect at Snorkel AI, to unpack why data-centric AI, evaluation, and domain expertise are now the true differentiators. Bryan shares lessons from working with frontier AI labs and highly regulated enterprises, explains why most AI projects stall before production, and breaks down what it actually takes to deploy AI safely and at scale.

 📖 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