July 17, 2025

Getting defensive

Hi there,

Here is this week's Hot or Not.

Hot: Defense tech

The Pentagon just handed out a DC seal of approval: Google, xAI, Anthropic, and OpenAI landed a collective $200M in defense contracts this week.

The contracts come amid rising momentum in the broader defense tech sector.

Funding hit $11.1B in just the first half of 2025, up 35% YoY.

Forces including geopolitical instability and tech advances (like drones) have contributed to the surge. 

In fact, two of the top 10 deals in Q2’25 went to defense players: 

• Anduril: $2.5B for autonomous defense systems and defense connectivity platforms
• Helsing: $693M for AI-powered defense applications

Get the details in CB Insights’ State of Venture Q2’25.

Not: Big tech M&A 

M&A from tech giants (Alphabet, Amazon, Apple, Microsoft, Meta, and Nvidia) is entering a sustained downturn. 

We project annual deal activity will hit just 12 transactions in 2025 — down from a peak of 66 deals in 2014.

Instead, big tech companies are turning to “quasi-acquisitions” to avoid federal antitrust review. 

This week, Google snapped up key talent from AI coding startup Windsurf executives in a $2.4B licensing deal — without actually acquiring the company. 

Recent deals following this pattern include: 

• Meta’s $14.8B investment in Scale for a 49% stake 
• Google’s $3B licensing deal for Character.AI while poaching the founders
• Amazon hiring Adept’s founders and many employees, with $330M+ going to licensing its tech 

Dive into the evolving M&A landscape here.

Hot: Voice AI  

Meta acquired voice intelligence platform PlayAI this week. 

Advancements in voice AI models — including real-time audio processing — have jumpstarted voice applications across use cases.

Here’s what the 3 most promising M&A targets in the space focus on: 

• ElevenLabs: Voice generation, dubbing, cloning, and conversational intelligence 
• Cresta: Voice agents for contact centers
• Cartesia: Voice synthesis and transcription

Not: Energy security

CB Insights’ State of Venture data shows quarterly earnings mentions of "AI" and "energy" spiking to 277 this year — a 5x increase as companies scramble to address power constraints.

While AI energy demands are surging, it will take years for big tech’s energy investments to come online. 

• Google's new $3B hydropower deal requires upgrades before use
• Meta's energy investments aren’t expected to be operational until 2030 
• Microsoft's nuclear partnership requires extensive regulatory approval

The +1

Source: u/ClemRRay via Reddit

Bad Hair Day for Data. Utterly confused.

I love you.

Anand

@asanwal 

Co-Founder & Exec Chair

P.S. Want to learn about which companies are best positioned to lead the AI era? Join our AI Readiness Benchmark briefing — register here.

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