Made by Payal Gusain

Edition 002|16th October 2026
Keeping Up with the Capital

Your weekly gossip on who's raising, investing, and building,
from Silicon Valley to India, Inc.

Hello there, stranger! 👀

Here for a sip?

Your favourite tea from Sand Hill Road to Koramangala is poured, and this week, everyone's whispering about who is actually paying for AI.

Last week, I said the stock market was about to get a say in what frontier AI is worth. I didn't expect it to start this soon. This week, public investors began asking harder questions about the money behind AI: the debt, the spending and the growth needed to pay for both. Private investors, meanwhile, kept paying up. So is AI getting cheaper, or just getting priced properly?

Let's get to it.

The Big Sip

AI is still growing fast, but investors are now asking if it can pay for itself

For two years, investors funded AI's build-out with little argument. This week, they started worrying about what it costs and how much of it runs on borrowed money. The worry showed up in three places at once.

First, chip stocks. US chipmakers lost $1.64 trillion in value in just over a week. Reuters put it down to bets on an interest-rate hike and worries about the cost of building AI.

Second, CoreWeave. CoreWeave rents out computing power from AI chips it owns, and it bought those chips with borrowed money: about $50 billion of debt, against roughly $13 billion in sales expected this year. Its shares fell more than 15% in a single day, and its bonds began trading like those of a company in trouble. Investor Chamath Palihapitiya asked on X, "Is the AI buildout creating a private credit bubble?" Elon Musk replied with one word: "Yikes." The same day, Gartner warned that about four in five companies like CoreWeave could shut down by 2030.

Third, and most visibly, Anthropic. On Wednesday, Anthropic gave its biggest investors an update ahead of its IPO, Reuters reported. From July to September, it brought in $16.8 billion, 45% more than in the three months before. That's more than three times what it made in all of 2025. But in the previous quarter, sales had more than doubled. Growth is still fast, but it's slowing, and investors are also weighing the high cost of financing AI. Some now want to value Anthropic at about $1.5 trillion in its IPO, down from the roughly $2 trillion they expected. That's $500 billion less, before a single share has traded.

A week earlier, the Financial Times also reported that OpenAI brings in about $50 billion a year, not the $70 billion investors had assumed.

Investors still believe in AI demand. What they're now questioning is whether the debt and spending behind it will pay off.

There's a case for calm. Evan Schlossman of Neostellar Capital, a listed fund that owns CoreWeave shares, told Fortune that CoreWeave's customers are on "take-or-pay" contracts, which means they pay even if they don't use the capacity. And a lower Anthropic price may even help. Michael Parekh, who ran Goldman Sachs' internet research in the 1990s, wrote this week that "an IPO priced to sell, that trades well afterwards, is often better than one priced at the peak."

Even at $1.5 trillion, Anthropic would be valued at about 22 times what it now earns in a year, and well above the $965 billion investors paid in May. The question is no longer whether AI is growing. It's whether it can grow fast enough to cover what it costs.

Connecting the Dots

While public investors sold AI stocks, private investors paid much higher prices for Modal, Ramp and Anduril

The same week CoreWeave's bonds slumped, three private companies were valued far above their last prices.

  • Modal: more than three times its May valuation. Modal rents computing power from more than 20 cloud providers and packages it so developers can run AI easily. It doesn't own the chips. It now brings in more than $1 billion a year and raised $750 million at a $15.75 billion valuation, more than three times what it was worth in May. Accel led the round, and Kleiner Perkins joined.
  • Ramp: from $44 billion to $60 billion in four months. Ramp offers corporate charge cards, expense management and bill-payment software to companies. It raised $1.85 billion at a $60 billion valuation, with Dragoneer, Thrive Capital and Founders Fund among the leads. It now sells a card built for AI agents, and early investor Keith Rabois told TechCrunch it will become the main way companies manage what they spend on AI.
  • Anduril: about $90 billion, up from $61 billion in May. Anduril is letting current and former staff sell up to $1.3 billion of their shares by 9 November, at a price that values it at about $90 billion, according to Dealroom.

Part of the gap is real. Modal and Ramp don't carry CoreWeave's hardware debt, so a pullback in AI spending would hit them differently. But part of it is timing. Public prices change every day. Private prices change only when a few investors agree on a new round or a tender.

Public investors reprice AI in days. Private investors reprice it only when they have to. If Anthropic lists well below $2 trillion, these private prices will be the next ones tested.

Siemens, AMD, Intel and Hitachi are investing in startups that fix AI data centres' power, networking and materials problems

On Wednesday, three startups working on the physical side of AI raised money. Each round included a big industrial company.

  • Power: Skeleton Technologies. AI chips can change how much electricity they draw within milliseconds, which strains a data centre's power system. Estonia's Skeleton Technologies makes energy-storage systems that smooth out those swings. Siemens led a round that values it at more than $1 billion.
  • Networking: Salience Labs. UK-based Salience Labs makes photonic chips, which use light instead of electricity to move data between AI chips across server racks. Its $125 million round was led by Bullhound Capital. AMD and Intel invested through their venture arms.
  • Materials: Scimplify. Bengaluru's Scimplify makes high-purity specialty chemicals and materials, including ones used in chips and batteries. It does this through a network of more than 500 partner factories and brings in about $200 million a year. Hitachi Ventures led its $25 million round, and Accel and 3one4 Capital invested again. A Japanese chip-materials company wanted a supplier outside China. Scimplify's sample passed its tests in two months, when the buyer had expected the process to take about a year.

Each of these giants is backing a technology its own business needs. Siemens, for example, sells electrical systems for data centres. Its executive Markus Grabmeier said, "Skeleton's portfolio perfectly complements Siemens' comprehensive data centre offering." Last edition, Samsung was doing the same with Indian chip startup Agrani Labs.

VCs invest for financial returns. Corporates also invest to secure technology and suppliers their own businesses need. With chip stocks falling, corporate money is starting to look like the steadier kind for hardware startups.

India could benefit. "Specialty chemicals demand has outgrown the models built to serve it," Radhika Ananth, managing director of India at Hitachi Ventures, told Global Corporate Venturing. She said much of India's factory capacity is underused and lacks the science and quality systems global buyers require. Scimplify is building a business to close that gap.

India, Inc.

Zetwerk's IPO values it below its last private round, yet its VC backers are selling more shares

Zetwerk is a Bengaluru-based contract manufacturer, founded in 2018. Companies send it their designs, and Zetwerk gets the parts made through its network of factories, from pipes to aircraft engine parts. Its customers span oil and gas, renewable energy and electric vehicles. It's backed by VC firms including Lightspeed, Peak XV and Accel.

On 15 October, Zetwerk opened its ₹5,012 crore IPO. At the top of its price range, the IPO values the company at about ₹25,600 crore. In March, private investors valued it at ₹27,000 crore. So the IPO price is about 5% lower, according to Mint. Mint notes the gap almost disappears if you leave out shares set aside for employees. Either way, there's no premium.

Even at that price, Zetwerk's investors want to sell more. The number of shares existing investors are selling in the IPO has grown by about half since the draft filing. Lightspeed, Peak XV, Accel and Kae Capital are among the sellers.

Big funds are buying. Before the IPO opened, they put in ₹2,251 crore, including BlackRock, Norway's sovereign wealth fund and 22 Indian mutual fund companies. The wider market was cooler. On day one, investors bid for less than a quarter of the shares on offer. That's despite an improving business: sales in the June quarter were 55% higher than a year earlier, and losses shrank.

Tonbo Imaging, a Bengaluru defence electronics maker, opened its IPO the same day and drew far more demand. Its ₹852 crore IPO is entirely existing investors selling their shares. On day one, investors asked for four times the shares on offer, even though Tonbo's revenue fell last year. Before the IPO, existing investors also sold ₹413 crore of shares at the top IPO price to Indian buyers, including 360 ONE's defence fund.

Compare that with private funding. Indian startups raised just $113 million from private investors in the week to 10 October. That's 72% less than the week before. And next week, Jio Platforms opens a ₹30,213 crore IPO. It's set to be India's largest ever. Right now, India's deepest pool of growth money isn't in VC funds. It's on the stock market, and much of it is Indian.

A slightly lower price you can sell at beats a higher one you can't.

India's ₹1 lakh crore deeptech fund has picked its first 19 fund managers, and each must raise private money alongside it

In November 2025, the government launched a ₹1 lakh crore fund to back research-heavy startups. It's called the Research, Development and Innovation (RDI) Fund. Last edition, chip startup Agrani Labs was applying for money from it. This week, the Economic Times reported who will hand most of that money out.

The fund picked its first 19 fund managers from more than 160 applicants. Together, they'll get ₹7,131 crore. Fourteen are VC funds, including Chiratae, Blume, Kalaari and Speciale Invest. Five are research organisations, including centres at IISc, IIT Madras and IIT Bombay.

There are two conditions. First, the managers can only back companies at technology readiness level 4 or above. That's a 1-to-9 scale of how mature a technology is. Level 4 means its parts have been shown to work in a lab. Second, the managers must raise private money alongside the government's. The government's money also won't all arrive up front.

The government isn't picking startups. It's picking the people who pick startups. That's a sensible approach for a state that doesn't want to run a VC firm. And the matching rule means private investors have to say yes, too.

This is a start, not a flood. The first group gets about 7% of the full fund, and a second group is promised soon. There's a warning sign as well. The same ET report mentions an Indian Express investigation that raised conflict-of-interest questions about how another arm of the scheme picked projects. If the money moves on time and the managers find private partners, Indian deeptech gets patient money with a VC's discipline.

The Deal Sheet

Watchlist

  1. Anthropic's public prospectus. It has to be made public at least 15 days before Anthropic starts pitching to investors. What price range will it show?
  2. Jio Platforms' IPO (21–23 October), and whether India's biggest-ever IPO leaves enough demand for the startup listings around it.
  3. CoreWeave's bonds. Do they recover, or does borrowing get harder for every company that owns AI chips?
  4. The RDI Fund's second group, and how quickly the first 19 managers find private money to match.

Rabbit Holes

Featured read

A CoreWeave investor explains how the loss-making neocloud will claw its way out of debt

If you read one thing this weekend, make it this. It lays out both sides of the week's biggest worry. CoreWeave owes about $52 billion, but it also has $103.7 billion in signed contracts. The question is whether those contracts hold if AI demand cools.

+ Sources

That's all for the week. See you at 6 PM IST, next Friday.