CrunchBase : A Growing Backlog Of Biotechs Haven’t Raised Funding Since The Boom

A Growing Backlog Of Biotechs Haven’t Raised Funding Since The Boom

As biotech startup funding continues to decline, the backlog of funded, private companies that haven’t raised capital in several years has grown quite large.

Per Crunchbase data, more than 200 private U.S. biotechs with $50 million or more in funding to date secured their last reported financing between three and five years ago. The list includes at least 15 biotech unicorns and emerging unicorns that haven’t raised known funding for at least the past three years.

From boom to not
Part of the reason for the backlog of companies with long funding lags is the shift in investor appetite for biotech. During the boom years from 2020 through 2022, startup investors put an average of $40 billion per year into the space — well above current levels.

Some of those were truly huge financings as well. The largest, in early 2022, went to Altos Labs, a San Francisco startup focused on cellular rejuvenation that launched with $3 billion in committed capital.

The biotech IPO market was also quite happening then compared to now. This offered companies yet another avenue to raise capital to fund research and clinical trials.

This year, by contrast, is on track to come in much lower. So far in 2025, only about $17 billion has gone to U.S. biotechs, per Crunchbase data. And of that, roughly half has gone to seed and early stage startups — leaving a smaller portion for late-stage financings for well-funded companies.


High profile companies see funding lag times
A number of the companies that have gone three-plus years without a round were fairly high-profile startups as well. Many are still chugging along, likely helped by having secured large commitments when funding flowed more freely.

For example Insitro, a startup focused on applying machine learning to drug discovery and development, raised $643 million between 2018 and 2021 but hasn’t raised a known round since. This spring, the company announced a 22% workforce cut in a move it said “extends our runway into 2027.”

Agtech unicorn Pivot Bio, which develops microbial nitrogen for farms, also hasn’t secured known financing in more than four years, per Crunchbase data. However, it should be noted that its last round — a $430 million Series D in 2021 — was pretty big. The company has a number of open positions and this spring announced plans to relocate a significant portion of its operations from Berkeley, California, to the Midwest.

Biotech Unicorns And Emerging Unicorns That Haven't Raised In 3+ Years


Ultima Genomics, developer of a low-cost sequencing platform, is another company that had a big round a few years ago and hasn’t raised since. The Newark, California-based startup launched in May 2022 with $300 in initial funding from backers including Andreessen Horowitz and Khosla Ventures. Of late, it’s been steadily announcing new partnerships.

Collectively, it’s a huge sum of commitments
If we look at all the well-funded biotechs in our query, they’ve collectively raised a tremendous amount of money.

In total, the 204 companies in our sample that haven’t raised for three-plus years previously pulled in $17.9 billion. That’s roughly equivalent to all the venture money that’s gone into biotech this year.

Will investors eventually see some return on investment for these commitments? Despite having some preternatural disposition toward pessimism, I’d say the outlook is reasonably positive.

For one, while the biotech IPO market has been quiet lately, cycles do turn. And when this one does, it looks like there’s a strong pipeline of compelling companies that could pursue listings. An uptick in M&A could also be in the cards.

Of course, not all these well-funded companies will prove successful, and some will likely fold in coming quarters and years. But hopefully, some of those that do make it will succeed in a big way.


Well-Funded Biotech Startups That Haven't Raised In 3+ Years

WWD : Pierpaolo Piccioli Shares His Vision for Balenciaga

Pierpaolo Piccioli Shares His Vision for Balenciaga
"I want to make the ordinary very extraordinary," he said in an expansive interview ahead of his debut Saturday night.

When Pierpaolo Piccioli landed in Paris to start working as Balenciaga’s new creative director last June, he went straight from the airport to the Balenciaga archive near Bourget, to which he would devote a total of three days, eager to inspect dresses that he had only ever seen in photos.

He would spend the next month working at Balenciaga headquarters, overlapping with the tenure of Demna, who would stage his final couture show on July 9 before taking the creative lead of sister house Gucci in Italy.

“So we had been sharing all the teams, all the spaces, and that was interesting, too,” he said. “To have two creative directors sharing the same house for one month, you learn the idea of respect, of tolerance, of sharing, which I think is important for life, not only for fashion.”

Those gestures say much about Piccioli, a thoughtful, driven and deeply humanist designer who was keen to know more about those who lead the house before them, to honor their contributions — and to get to the crux of how he would put his own stamp on Balenciaga.

From his deep dive into the archive, the Italian designer quickly distilled the essence of the Paris house, its legacy of disruption and the “culture of couture” forged by founder Cristóbal Balenciaga.

He was enthralled to discover how the legendary couturier translated very severe and austere lines into light and supple garments, meticulously choosing the right fabrics and putting air between them and the wearer.

“I understood that all his work was based on the idea of the body, starting from the body, sometimes going very far from the body, but always with the body at the center of his work,” Piccioli related during an interview at Balenciaga’s offices on the Rue de Sèvres, where his debut show is scheduled for Saturday night. “So I want to apply that method to my way of working on Balenciaga, putting humanity at the center of the research of fashion, and making it relevant for today.

“I want to get into reality through silhouette and fabrics. I didn’t want to be nostalgic. For me, it was important to be relevant for today, silhouettes that could be interesting today, but also wearable today… To make the ordinary very extraordinary.”

Even before he landed in Paris — his appointment was revealed last May — Piccioli had traveled to the founder’s birthplace and visited the Museo Cristóbal Balenciaga in Getaria, Spain.

There he was flabbergasted to discover video footage of a woman wearing a dark Balenciaga sack dress on the streets of Paris in the ’50s, encountering curiosity and visible scorn.

Piccioli saw only innovation and liberation.

“Seeing the reaction of people made me understand how relevant, how disruptive and how kind his work was, freeing women from the weight” of their clothes, he said, noting that Dior’s original New Look weighed roughly nine pounds, versus about one or two for the sack dress.

For the interview, Piccioli was dressed in black layers, his outfit sparked by a white and red pair of Triple S sneakers, size 42, which he purchased when Balenciaga first released them in 2017. The hefty shoes were emblematic of the brand’s renown within streetwear circles, prized for its oversize outerwear, slogan knits and distressed jeans.

Balenciaga has flirted with a variety of fashion directions under its previous creative directors, which also have included Josephus Thimister, Alexander Wang and Nicolas Ghesquière, who leaned into an experimental and at times futuristic approach that catapulted the house back into fashion’s big leagues.

Before parting ways with Valentino in March 2024, Piccioli had spent most of his career at the Roman house and sharing the creative director role jointly with Maria Grazia Chiuri from 2008 until 2016, when he took the lead. He started in fashion with a 10-year stint at Fendi, also working there alongside Chiuri.

Piccioli has been teasing his new vision for Balenciaga in a campaign that features his tattooed forearms writing with a brush and a pot of ink; a 1967 wedding ensemble by the founding Spanish designer that was also the first picture Piccioli ever uploaded on his personal Instagram page, and Roni Horn portraits of Isabelle Huppert circa 2005-2006, without makeup or red carpet attire.

“In her humanity, not as celebrity,” Piccioli clarified.

There’s also a black-and-white image of Lucio Fontana about to slice a canvas. “That act was very meaningful, because he was creating a new world, a new possibility, and it was radical, but very spontaneous and instinctive,” the designer said.

As a foil to the nearly sci-fi sleekness of the wedding ensemble with its Darth Vader-esque hat, Piccioli also showcases the founder’s famous rose dress, memorable for its face-framing doughnut of scrunched fabric.

“In that tension lies the essence of Cristóbal, maximalism versus minimalism — both as deliberate and spontaneous gestures.”

In a wide-ranging conversation with WWD, the designer elaborated on his archive trawl, his initial intentions and his ambitions for Balenciaga:
WWD: Should we be surprised to find out you like Balenciaga sneakers?

Pierpaolo Piccioli: I love what has been done here. It’s not respectful, and not good for the house to deny what has been done before. I feel that a work in continuity and transformation makes the house richer, showing new sides, new aspects, new angles, new points of view.

WWD: Please tell us more of of your impressions after visiting the archive.

P.P.: As a designer, we all know the work of Cristóbal Balenciaga from afar — the volumes, the proportions. But when you see them up close, you really understand how many people have been inspired by Cristóbal. Those shapes were coming from from a very architectural point of view.

WWD: How did you start after gathering all those impressions?

P.P.: For me, researching fabrics was very important, and particularly the silk gazar used by Cristóbal, who developed a double-yarn version which allowed a more rigid structure but without any extra weight, so this allowed him to create his architectural silhouettes.

I decided to create fabrics with this idea in mind, but not only silk gazar. This collection is not at all an homage to Cristóbal. It’s my point of view, but I wanted to work on fabrics with the same kind of approach, with a tension between lightness and structure. So I created cotton gazar and wool gazar that could be more relevant for daily wear and life today.

It took time to arrive at the simple concept of the structure and the lightness, the silhouette and the air.


WWD: And what was your main takeaway from your exploration of the founder’s birthplace?

P.P.: I feel that Cristóbal was, like me, both instinctive and rational at the same time. So once I found the method that can be good for me and close to Cristóbal’s, you then have to let your instinct guide you. I want to incorporate my own sensibility and deliver in my own way. I also saw, of course, the work of Nicolas (Ghesquière) and Demna, of course.

WWD: And your impressions seeing the original clothes up close?

P.P.: The colors were sometimes almost violent. I felt from Cristóbal a deliberate gesture and intentionality of choosing one fabric, one color, one shape. And that’s my way of shaping a collection, also colors and fabric in one gesture only. I feel that some shapes have to be in one color, in one fabric. That’s the instinct.

WWD: So should we expect a colorful debut?

P.P.: Yes, there’s color and there will some prints. I found some scarves that were very interesting because there was just an intention of color, like a human brush stroke of color on a white surface. And there are prints that look like different fabrics, like tweed, but are actually printed on gazar or taffeta.

WWD: Were you given any specific directives or guidance from management?

P.P.: Not at all. I felt super free to follow my instinct and my vision about Balenciaga, and I felt trust from Gianfranco (Gianangeli), my CEO, and from all the team, too.

I believe that now more than ever, the role of a creative director can only fully flourish when it is met with genuine trust and meaningful support from the CEO. That alignment is what allows creativity to move beyond ideas and truly become impact.

In this company, I have been fortunate to find exactly that in Gianfranco. His support and confidence have not only strengthened my work, but also given me the sense of being understood and valued in what I bring. I am deeply aware of this, and sincerely grateful.

WWD: You said when you joined that you would honor all the designers that came before you. How?

P.P.: They’re part of the process. There are pieces like, say the T-shirt, one of the symbols of Demna, that I did with a very light jersey with a shape that can look like the very famous wedding dress.

Demna brought Cristóbal into the streetwear kind of reality. For me, this house is, of course, based on the idea of couture. So I want to use this idea of couture as culture to approach pieces that could be wearable, like a T-shirt, or a pair of jeans.

It’s not about elevating — I hate this word — but it comes from construction, study and research. Sometimes when you think about couture, you think only about beauty and not reality and coolness. I think coolness has something to do with reality.

WWD: What do you hope to accomplish with this first show?

P.P.: I decided to show only women’s because I felt that I had to redefine a new aesthetic for this house. Our job — and I repeat this to myself every day — is about witnessing our times through fashion and through an idea of beauty. My purpose is to define and to deliver my vision of beauty, but related to our times and to this house, so keeping the codes of the house, like disruption, creativity, adding probably humanity and couture as culture, but trying to do a reconciliation with everything that’s been done before.

WWD: Why did you decide to have your first show at Balenciaga headquarters?

P.P.: Because it’s a space that is warm. I wanted the intimacy of a salon de couture, but without the form of a salon de couture.

I like the also the idea that Demna did his retrospective exhibition here. So in a way, I’m starting where just left.

WWD: It’s not the easiest moment for business and luxury, and amid many creative changes. Does it affect you?

P.P.: Actually, I don’t feel this. We can deliver a different idea of fashion. In this game of musical chairs, we are actually people, and each of us reacts in his or her way. I’m one of the chairs, but I’m a person. I just do my own thing, and I don’t feel the pressure of being part of this game.

I still feel this job as an opportunity to express my ideas and my values through my creativity.

WWD: Under Demna, the house became known for black, oversized, and a streetwear sensibility. Should we expect any of that, or some of that, to continue?

P.P.: Demna has been disruptive, like Nicolas has been disruptive, and Cristóbal has been disruptive. Disruptiveness is part of the DNA of this house, and I like this continuing this idea of disruptiveness.

You will see a silhouette that is different from what from what you see now, but in continuity with the work of the people who have been before.

WWD: What are your ambitions for the house, creatively and culturally?

P.P.: To me Balenciaga is, and must stay, the most relevant house in terms of creativity. To me it’s the most creative, the most disruptive, the most fashion. These past years, we have been talking a lot about business. But when talking about fashion, creativity has to be the leading force and the most relevant force.

WSJ : Stock Funds Hold a 11% Gain for 2025 So Far

Stock Funds Hold a 11% Gain for 2025 So Far
If the market’s rally holds, it’ll be a third straight year of double-digit gains. Plus: A Financial Flashback to 20 years ago, the Refco commodities debacle.

Is it time for fund investors to do a home-run trot yet?

With stock indexes smashing records, the average U.S.-stock fund rose 7.2% in the third quarter, to push the year-to-date gain to nearly 11%, according to LSEG data. Those are gaudy numbers for mutual funds and exchange-traded funds compared with earlier in the year, when it looked as if the stock market would register a poor year.

In fact, stock funds are now on pace to rise in double digits for three straight years, even though the 2025 performance won’t likely match last year’s 17.4% gain or the previous year’s 21%.

Stocks have shaken off the tariff-induced negativity of earlier in the year, and interest rates are declining.

“Stocks defied the typical September weakness,” says Adam Turnquist, chief technical strategist for LPL Financial. “Earnings momentum, a good-enough economy, the resumption of the rate-cutting cycle and continued signs of runway for the AI secular growth theme have been the primary catalysts.”

But some analysts caution that, like in baseball, those homers for stock investors could start turning into singles, or outs. Stock rallies that might be stretched, like this one, have a tendency to fizzle.

“October is known to be a volatile month for stocks, and with elevated valuations and stocks at record highs, investors should always expect pullbacks,” says Charlie Amato, chairman and co-founder of SWBC. Still, he adds, ”The backdrop for stocks remains strong, with growing corporate profits, the prospect for additional Federal Reserve rate cuts, and fading tariff uncertainty.”

Among fund categories, funds that hold stocks of large-capitalization “growth” stocks like Nvidia and Facebook parent Meta Platforms are strong, with the category up 15.2% for the year so far, including the third quarter’s 7.7% advance. Their counterparts, large-cap “value” funds—focusing on stocks believed to be trading below the companies’ fundamentals—have also stirred, and are up 12.9% so far in 2025.

International-stock funds rose 6.3% in the third quarter, to push their year-to-date advance to 17%. “While stock valuations are expensive, U.S. stocks have still underperformed overseas stocks so far in 2025 and have some catching up to do,” says Amato.

Bond markets continue to be heated, as investors buy corporate debt. Bond funds that are focused on investment-grade debt (the most common type of fixed-income fund) were up 0.8% in the quarter, and are now up 3.8% for 2025 so far.

Fund flows
Bond funds and international-stock funds drew cash in the third quarter, as some wary investors pared their exposure to U.S.-stock funds—particularly in July, when there were intense concerns over tariffs, a market worry that has since abated.


Investors sent a net $27.8 billion to international-stock mutual funds and ETFs in the third quarter, based on Investment Company Institute estimates, and $213.8 billion to bond funds.

But flows to U.S.-stock funds were a negative $345.6 billion for the quarter, including $299.5 billion pulled in July.

Winners’ Circle
Managers of large-cap growth funds again took most of the top positions in our latest Winners’ Circle review of the top-performing actively managed U.S.-stock mutual funds.

Taking the crown was Morgan Stanley Institutional Growth Portfolio (MSEQX), with a 72.4% total return for the past 12 months, based on Morningstar Direct data. Morgan Stanley Insight Fund (CPODX) was a close runner-up, with a 70.2% return.

These and other funds in the large-cap growth category benefited from the interest in artificial-intelligence companies and other tech stocks.

In the No. 3 position was Transamerica Capital Growth (IALAX), with a 66.4% return. The survey included 1,189 funds, which together posted an average 12-month return of 10.6%.

Few people outside Wall Street pay too much attention to commodities traders. But on Oct. 10, 2005, one of the world’s largest commodities brokers, Refco, collapsed. It was shocking news about a seemingly ever-present fixture in the commodities world.

“It was kind of like a smaller version of the Enron collapse,” says Art Hogan, chief market strategist at B Riley Wealth Management. It came on the heels of the 2002 Sarbanes–Oxley Act, a bill designed to prevent accounting fraud.

The first news of the Refco collapse began when its CEO, Phillip Bennett, stepped down, following the firm’s discovery that another company controlled by Bennett owed Refco $430 million. The debt was described to investors as “receivables,” aka money owed to Refco. There was no indication in filings that Bennett’s company owed the cash.

Following the discovery of the debt, Refco advised that financial statements from 2002 onward shouldn’t be relied upon. Refco stated that Bennett had repaid the debt, and the company had notified authorities. Refco stock dropped 45% to $15.60 a share in a single day, on the news.

“The decision for Refco to go public in August of 2005 was what opened a Pandora’s box,” Hogan says. “Bennett was able to get around all the bankers and auditors.” The IPO raised $583 million but was full of accounting malfeasance.

Refco filed for bankruptcy in October 2005. Bennett was sentenced to 16 years in prison in 2008.

“Despite the best of intentions, I made an unacceptable and appalling error,” Bennett said at sentencing. He was released in 2020, a judge calling him a “model prisoner.”

FT : Pierpaolo Piccioli’s next act

Pierpaolo Piccioli’s next act
The former Valentino designer will unveil a debut collection for Balenciaga this week. The stakes could not be higher

From the vast windows in Pierpaolo Piccioli’s new office, right at the very top of the Balenciaga headquarters on one of the grandest avenues in Paris, it feels like you can survey all of fashion’s capital city.  

“I can also sunbathe up here,” Piccioli jokes, bathed in light as he reclines on a black leather sofa in his new perch. Covered in tattoos and dressed head to toe in black — his longtime uniform — he has a thin moustache and wears shiny square-framed sunglasses that cover his deeply lined and tanned face. 

“A view like this in Paris is very special,” he adds. “Looking out reminds you to appreciate the past while trying to build the future.”

For all the pleasantries — and famously Piccioli is one of the true nice guys of fashion — the stakes are sky-high ahead of his debut collection at Paris Fashion Week on October 4. Under the creative leadership of his predecessor Demna, who left this year to take the reins at Gucci, Balenciaga grew from $390mn in annual revenue to around $2bn, according to analysts’ estimates. At one stage, it was the most hyped luxury brand of the past decade. Both Gucci and Balenciaga are owned by Kering, the struggling French conglomerate which thanks to strategic mis-steps and a global luxury slowdown has seen tumbling group sales, a string of profit warnings and a 50 per cent plunge in its share price over the past two years. Under new chief executive Luca de Meo, a reversal of fortunes is desperately being sought. Gucci may be the biggest brand, but every turnaround now under way in most Kering houses must be a success. 

Piccioli, a 58-year-old Italian who spent 25 years at Valentino, eight of them as the sole creative director before leaving in March 2024, was a bold choice for the Balenciaga reset. It is also a potentially risky one. 

After all, Piccioli is one of fashion’s great romantics, known for designs full of exuberance, joy and optimism. His Valentino couture shows, full of airy gowns and elegant tailoring in cleverly co-ordinated colours, were especially adored by the fashion industry. Sometimes, for the finale, Piccioli would bring out the seamstresses who had worked on the collection to stand with him on the runway, sending audiences to their feet. Those shows felt warm and human in an industry renowned for being the opposite.  

“Pierpaolo is known for his absolute passion for the craft, a couturier and visionary in the truest sense,” says British Vogue’s head of editorial content Chioma Nnadi. “He also happens to be incredibly empathetic and approachable as a person, so that commitment to elegance is rooted in a very soulful place.” 

But is that what a world of increasingly casual dressers really wants to buy? Especially from a brand like Balenciaga?

During his tenure, Demna took it from a niche fashion maison to one of the most provocative and boundary-breaking brands in the industry. He asked the world if Crocs and Ikea totes could be worth four-figure price tags, themed shows around war in Ukraine and the rule of capitalism, and was a key architect of the monster sneaker and elevated streetwear trend that dominated sales across the entire sector. Sometimes, he flew too close to the sun, especially with an advertising campaign in 2022 that triggered allegations that he condoned child exploitation, significantly denting both popularity and sales. Now, it’s Piccioli’s turn in the reinvention hot seat.  

“Balenciaga and Gucci are brands that soared on streetwear which took the fashion and luxury world by storm,” explains Bernstein luxury analyst Luca Solca. Now, the problem is that streetwear is no longer hyped in the way it was, and the brands that embraced the category cannot rely on it for guaranteed growth.

“The dilemma is this: continue with streetwear and be boring, or try to move away from it but run the risk of taking a wrong approach? For Balenciaga in particular, it is so associated with that aesthetic that it will be hard to return to the status quo ante,” adds Solca. “It’s a very big task for Pierpaolo. Of that, there is no doubt.”

‘I wanted a challenge’
If Piccioli was feeling the strain three weeks before the show, then he certainly wasn’t showing it.

“I don’t feel commercial pressures in this job,” he says with a shrug, a rather astonishing line he also used to say at Valentino. His wrists and neck glisten with golden trinkets, including flashes of orange coral and a delicate charm necklace of iridescent beetles, as he leafs through sketches and swatches of silk gazar that offer glimpses of his Balenciaga vision.

“Of course, you cannot be a designer at a big house today without working closely with other teams, like marketing or retail or with your CEO,” he continues. “We talk all the time. But I respect those people and their ability to do their jobs well. They let me do mine.”

Born in 1967 in Nettuno, a coastal town just outside Rome, Piccioli has always lived and worked near his birthplace. Now, he has moved to Paris. The first thing he did when he got off the plane, he says, is go straight to the Balenciaga archive, a vast warehouse only a few kilometres from the airport. After leaving Valentino last year and spending time with his family (Piccioli has a wife, Simona Caggia, and three children), he was ready to start another chapter, whatever the stakes.

“I wanted a challenge. After so long in one place at Valentino I didn’t want to be in my comfort zone again,” he says. Piccioli was first inspired to get into fashion because of photography. But Cristóbal Balenciaga, whose influence on silhouette, line, spirit and aesthetic remains everywhere in fashion today, had always been one of his design heroes. They both grew up in small towns, he says, not fashion capitals. Both felt inspired by women on the streets, not catwalks.

“He knew what it meant to be relevant, which is so important as a designer. He was a disrupter and innovator,” Piccioli adds, nodding to a framed photo of Balenciaga’s silk gazar 1967 wedding dress leaning against the wall which he says is “one of his greatest inspirations”. Next to that is a framed handwritten scrawl of a Brancusi quote which he calls his manifesto: simplicity is complexity resolved.

Balenciaga widened shoulders, let out waists and pioneered cocoon shapes. His approach to the female body celebrated shape, form and power rather than secondary sexual characteristics, with a radical recasting of the typical feminine silhouette from the hourglass shapes that had come before. This approach and in particular, a love of volume, have also been Piccioli’s longtime calling cards; his sketches for the debut show silhouettes which use the body as a starting point before moving away from it, introducing a third element: air. 

“The challenge is to make a new silhouette with no structure inside to keep the shape. Going far from the body, while still keeping the body in mind,” he says excitedly. “You have to think like an architect and change perceptions of space with space itself.”

The dystopian streetwear that defined much of Balenciaga’s previous era feels far away from the studio. He won’t be drawn on colours, other than to say there will be a lot of white — fitting as a carte blanche, or a blank page, for a new start — without erasing house hallmarks entirely. 

“I’m not so insecure as to try and cancel what has been before, because a house is made by lots of people. Demna hasn’t disappeared, he just passed me the torch,” Piccioli says. “I have let my instincts go for this new Balenciaga. I don’t want to overthink it. What I do want to do is reflect the state of the world that we are living in.”

Authority with age
Reflecting the current world order has been front of mind for many designers this season. The complicating factor is whether the world is that interested in luxury anymore. Fifty million luxury consumers exited the market between 2022 and 2024, according to a report last year by Bain & Company, many of them aspirational shoppers who felt left behind by skyrocketing prices. HSBC says the average price of luxury goods in Europe rose roughly 52 per cent since 2019. Piccioli acknowledges that a gap between prices and value in his sector has emerged. 

“Luxury is in a difficult place now. People can’t feel they are overpaying for what they get,” he says. “That’s why this business needs to lead with pure creativity, now more than ever. You have to create emotional connections, not just skate the surface of things. That’s just not enough.”

The problem is that luxury is a giant product pyramid with runway collections right up at its very pinnacle; you can be moved by an Instagram video of a Paris runway show, but will it still propel you to buy a perfume or a handbag when prices are double what they were before the pandemic? There are other challenges too. While young at heart and ultra playful, the core of Piccioli’s designs until now represented a mature and sophisticated elegance; but most young people under 30 these days appear to prefer pyjamas. Questions have also been raised around his ability to design smash hit accessories, the financial lifeblood of most luxury brands; after the success of the Rockstud line of the early 2010s, Valentino never really had another sure-fire hit. Has he got an “it” bag or shoe in him?

What he does have in spades is experience. Of the 13 designers showing debut collections in Milan and Paris this season, Piccioli is the eldest. He likes it that way, he says, and has plenty of young people around him. Time has made him comfortable in his skin, and he knows when to trust his gut when changing the image of fashion. Piccioli was way ahead of the curve on inclusive casting; proper model diversity, he has said, often made the beauty of his designs in their many idiosyncratic colours sing louder.

“Authority with age is something I like. It gives me the confidence not to worry about trying to please everyone,” he says. “I know perceptions of Balenciaga are that it is young and cool and I want to keep some of what is there now as we move forward into this new stage.”

The pressure on his shoulders — on all these designers’ shoulders to deliver commercially successful collections — must be enormous. So is the workload (Piccioli is in charge of Balenciaga’s womenswear, menswear, accessories and couture). The key to surviving it, he declares from his penthouse with a view of the rooftops of Paris, is staying in touch with reality — or at least opening a window on it. To him, being a creative director is not just a job. He has a sense of responsibility too.   

“What’s happening in the world right now is just horrible. I don’t reflect ugliness, but I do try to offer optimism, which I don’t see as escapism, but rather a new way of thinking,” he says. “I am beyond privileged to have freedom of expression, and talk through my clothes. I have always focused on the humanity of design. That isn’t about to change now.”

>>> Barron’s Weekend Summary

Cover:
-Warehouse clubs, exemplified by Grapevine Sam’s, have evolved from their utilitarian roots into vibrant shopping environments. Unlike the past's dull gray interiors and long lines, these stores now feature bright lighting, machine-learning technology for rapid checkout, and inventory-tracking bots, enhancing the shopping experience. Sam’s Club, alongside competitors Costco and BJ's, is experiencing significant growth, driven by an increase in visitor traffic and customer loyalty in the post-pandemic era. These retailers are thriving by meeting consumer demands for low prices and selectively curated merchandise. Notably, Sam’s Club has increased its sales by 50% over the past five years without any new store openings, paralleling revenue growth at BJ's and Costco. Annual visits to Sam’s have consistently risen from 2019 to 2024, highlighting the enduring appeal and success of these warehouse clubs.
Interview:
-Daisy Veerasingham, CEO of the Associated Press (AP), reflects on the longevity and challenges of the 179-year-old not-for-profit news organization. Veerasingham, who has led the AP since 2021, emphasizes the difficulties posed by a volatile business model, threats from AI, declining trust in media, and political pressures. The AP operates primarily as a business-to-business provider, aiding various media and information outlets worldwide, while still maintaining a structure rooted in its 1846 cooperative origins. Recently, the organization has also ventured into a direct-to-consumer strategy, aiming to address the demand for non-partisan news without competing directly with its existing customers. This direct approach caters to a niche audience, distinguishing the AP by providing neutral news reports consistently across different outlets, reinforcing its commitment to nonpartisanship.
Tech Trader:
-As companies face soaring costs associated with artificial intelligence (AI), they are seeking ways to monetize free consumer applications like ChatGPT, using strategies reminiscent of the Web 2.0 era focused on advertising and e-commerce. Meta Platforms, the creator of Facebook and Instagram, invested $37B in AI data centers last year and plans to increase spending to approximately $70B in 2025, necessitating a $14B cloud contract with CoreWeave through 2031 to meet growing computing power demands. This investment strategy differs from that of Amazon, Microsoft, and Alphabet, which leverage cloud services for profit; Meta's expenditures are solely for internal use, lacking any revenue from cloud customers to balance costs.
The Trader:
-Markets have historically risen during government shutdowns, with temporary declines in economic activity that usually rebound post-shutdown. However, the current shutdown poses risks, particularly if the Trump administration enforces mass government layoffs, potentially exacerbating economic damage. Investors are primarily focused on the forthcoming third-quarter earnings season, with companies like Delta Air Lines reporting soon, followed by major banks on October 14. While S&P 500 earnings are projected to rise by approximately 8% year-over-year, recent data indicated a decline of 32,000 jobs in September, revealing a disconnect between corporate performance and employment figures. The healthcare sector emerged strongly, with the Health Care Select Sector SPDR fund rising by 7.1%—its best weekly performance since 2022—after a deal between President Trump and Pfizer was announced, requiring price reductions on medications for Medicaid and investment in US research, while alleviating fears of more severe regulatory actions against drug companies.
-Fermi, a Texas-based company focused on supplying power to data centers through natural-gas plants and nuclear reactors, has rapidly progressed from an initial concept to a public company, launching its IPO at $21 per share and achieving a market cap of $13.8B. The stock experienced a significant surge of 55% on its first day of trading, reaching $32.53. Legal advisor Nick Davis expressed surprise at the speed of Fermi's public offering, which was barely conceptualized a mere ten months prior. Founded in January, Fermi plans to establish the world's largest data-center campus on a 5,236-acre site leased from Texas Tech University in the Texas Panhandle. This ambitious site aims to integrate data-center warehouses with various power sources, including natural gas, nuclear, solar, and batteries, potentially generating double the electricity consumed by all power plants in New York City by 2038, according to CEO Toby Neugebauer. While the stock is drawing investor interest amidst the growing demand for electricity due to AI, the company faces significant challenges as it attempts to construct its power infrastructure, likening its operations to a car being built while in motion.
Features:
-Gilead Sciences is experiencing a resurgence in investor interest, following a challenging decade since the launch of its groundbreaking hepatitis C medications, Sovaldi and Harvoni. While the stock peaked at over $122 in 2015, it faced a prolonged decline due to the one-time success of these treatments, which led to a lack of sustained revenue. However, Gilead has now diversified its portfolio, with only 10% of its sales stemming from liver disease treatments, and over two-thirds from its robust HIV segment, which has recently been bolstered by the new drug Yeztugo. Analysts view the stock favorably, noting its sustainable business model and a projected 2026 earnings multiple of 13, alongside a generous dividend, making it an attractive long-term investment. Recent financial results exceeded expectations, signaling optimism in Gilead's HIV business, prompting Truist Securities to upgrade the stock to a Buy rating, reflecting confidence in its market position.
-In the third quarter, investors in gold mining stocks have entered a period of significant gains, with Morningstar’s equity precious metals category experiencing a remarkable 43.8% surge, outpacing other asset classes including digital assets and the China region. The indexed VanEck Gold Miners ETF has seen a staggering year-to-date increase of 125%, significantly higher than the 46% rise in the SPDR Gold Shares which directly invests in gold bullion. In contrast, the Vanguard S&P 500 ETF recorded a more modest return of 8.1%, while the Vanguard Total Bond Market ETF achieved a 2% gain. Gold miners typically benefit through leveraged profit margins when bullion prices rise above their production costs. Currently, with a median cost of $1,600 per ounce for production and bullion prices at $3,863, profit margins are exceptionally high.
Europe:
-Spotify Technology founder Daniel Ek will resign as CEO by the end of the year, transitioning to the role of executive chairman of the board. Co-Presidents Gustav Söderström and Alex Norström will step up as co-CEOs. Ek stated that this change reflects the existing management structure, as he has delegated much of the operational and strategic oversight to Söderström and Norström in recent years. Despite a 2.7% decline in premarket trading, Spotify's stock has seen a 63% increase this year. Ek founded Spotify in 2006 with Martin Lorentzon and took the company public in 2018 via a direct listing valued at approximately $27B. The firm, now based in Luxembourg, boasts over 696M users and a market cap nearing $148 million, achieving its first net profit in 2024. Söderström and Norström, who have been co-presidents for nearly three years and have extensive tenures at Spotify, will continue to drive the company’s growth.
Emerging Markets:
-No update
Commodities:
-Shares of Lithium Americas surged 23.3% to $7.04 following a federal government investment that provided the company with a 5% equity stake. This came after an agreement with the US Energy Department to initiate the first $435M draw from a larger $2.3B loan. The agreement supports the development of the Thacker Pass lithium deposit in Nevada, a critical source for electric vehicle batteries, in partnership with General Motors. Although Thacker Pass is not yet operational, the investment is expected to bolster U.S. lithium production, enhance supply chains, and create jobs. CEO Jonathan Evans emphasized the importance of this support for energy security and production capability in the U.S.
Streetwise:
-A small number of companies in the S&P 500 index display dividend yields exceeding 6%, although this is more alarming than appealing, suggesting financial struggles and potential payment cuts. Collectively referred to as the "Suspicious Eight," these companies starkly contrast the "Magnificent Seven" in the market. With a median yield of 6.3%, investments in these stocks could double in 11 years if share prices remain stable. Notably, AT&T has experienced a significant stock price increase, reducing its yield to a more acceptable 4%. Despite the allure of high yields, this approach is cautioned against, and dividends, while favorable, should not be the sole investment strategy as current S&P 500 yields are at a low 1.1%. This decline in yield is largely due to high stock valuations and corporate reserves, with last year's dividends only constituting 36% of profits, well below historical averages. Long-term investors have seen that reinvested dividends have accounted for approximately 85% of the cumulative return of the S&P 500 since 1960, though such long investment horizons are not the norm for most. Overall, while dividends can be beneficial, there are more effective investment methods available.

>>> Weekend Papers Summary

FINANCIAL TIMES
-President Donald Trump has urged Israel to cease bombings in Gaza immediately to facilitate the safe and swift release of Israeli hostages. He expressed his belief that Hamas is ready for a lasting peace following their announcement to free all 48 captives, both living and deceased, in accordance with the terms of Trump's 20-point peace plan presented during the recent UN General Assembly. Hamas also expressed gratitude to Trump and Arab nations for their roles in seeking to conclude the conflict and indicated its willingness to engage in immediate negotiations through mediators regarding the specifics of the release.
-Advisers to Pakistan’s military leader Asim Munir proposed to US officials the development of a port in the Arabian Sea, specifically in the fishing town of Pasni. This port could provide the US access to Pakistan's vital mineral resources while strategically positioning Washington in a geopolitically sensitive area, situated 100 miles from Iran and 70 miles from the China-backed Gwadar port. Although the plan reflects Pakistan's response to the changing geopolitical dynamics in South Asia, it is not formal policy. The proposal was shared with US officials before Munir's recent meeting with President Donald Trump, but reportedly did not receive discussion during that meeting. Furthermore, this initiative is one of various proposals by Pakistani officials aimed at fostering positive relations and collaboration with the Trump administration, which also includes cooperation against the terrorist group Isis-K and support for Trump's initiatives in the region.
-Italy has experienced significant disruption due to a nationwide general strike in solidarity with the Palestinian people, intensifying pressure on Prime Minister Giorgia Meloni regarding the humanitarian crisis in Gaza. Called by major trade unions and deemed illegal by authorities, the strike affected public transport, schools, railways, and ports, with protesters demanding an end to Israel's Gaza offensive. Tens of thousands marched in cities like Rome, with disturbances reported, including a temporary airport closure in Turin. Meloni commented that the strike would not benefit Palestinians and would harm Italians. This event follows Israel's interception of a flotilla carrying humanitarian aid for Gaza, which led to the arrest of activists, including 40 Italians.
-Sanae Takaichi has been elected as Japan's first female prime minister by the ruling Liberal Democratic Party, defeating Shinjiro Koizumi in a tightly contested leadership race. A political veteran, Takaichi previously supported Shinzo Abe’s "Abenomics" and will succeed Shigeru Ishiba, who faced challenges that led to a loss of majority in parliament. Takaichi now confronts geopolitical threats and strained US relations and must navigate coalition support with opposition parties to secure her position, reflecting her acknowledgment of future difficulties.
-The conflict between Donald Trump and Democrats escalated as the government shutdown entered its third day, impacting federal operations and delaying key reports like the monthly jobs data from the Bureau of Labor Statistics. A Senate vote to reopen the government failed, with most Democrats opposing the legislation. The shutdown could result in significant economic losses, with estimates ranging from $7-15B per week, depending on the source. Predictions suggest the shutdown may extend beyond two weeks.
-Over the past decade, the Amazon river has increasingly been used for exporting cocaine from Peru and Colombia to Europe and Africa. Traffickers exploit indigenous communities to hide and transport drugs, leading to heightened local drug problems. Villagers, like Carlos, are pleading for assistance, expressing insecurity with the infiltration of drugs into their communities. Activist Orlando Possuelo noted a drastic increase in drug use during recent visits, highlighting the pervasive impact on small towns along the river. A tragic case illustrates the desperate measures families take against addiction. Brazil, as the world's second-largest cocaine market, reported seizing 128 tonnes last year, which accounts for only a small fraction of drugs smuggled in.
-US billionaires, including Stephen Schwarzman, Ken Griffin, and Jan Koum, have purchased residences at London's Peninsula, a luxury hotel development. Other buyers include Todd Boehly and Dan Snyder. The site features apartments with views of Buckingham Palace and Hyde Park, and it offers amenities such as an indoor swimming pool and a chauffeured car service. This trend reflects a growing number of Americans seeking second homes in London amid increasing UK citizenship applications.
-Greater Manchester Police confirmed that officers shot one of the two victims who died in an attack on a synagogue, along with one of the injured survivors. The attacker, Jihad Al-Shamie, had recently been arrested on suspicion of rape and was shot by police after allegedly running a car into people and stabbing one person outside the Heaton Park Hebrew Congregation Synagogue. Police noted that one victim, previously thought to have been killed by Al-Shamie, appeared to have suffered a gunshot wound, with Chief Constable Sir Stephen Watson stating that Al-Shamie was not believed to have been armed and that all shots fired were from police.
-DoorDash CEO Tony Xu and Deliveroo founder Will Shu first met over coffee in San Francisco more than a decade ago, both launching food delivery startups. While DoorDash has become the US leader with a market cap over $110bn, Deliveroo struggled during the Covid pandemic. Despite their different trajectories, the two maintained a good relationship, culminating in DoorDash's recent £2.9bn acquisition of Deliveroo, a figure significantly below Deliveroo's previous valuation of £7.6bn. Xu pursued the acquisition to enhance DoorDash's international expansion plans into the UK and other European and Middle Eastern markets. The deal was finalized quickly after initial discussions in London pubs and restaurants. Facing decelerating US sales and increasing competition, Xu has engaged in several acquisitions to broaden DoorDash's market presence, including the restaurant booking platform SevenRooms and advertising firm Symbiosys.
-A federal court in New York has permitted a junior investment banker, Kathryn Shiber, to pursue claims against Centerview Partners for violating US disability laws after her firing in 2020. Shiber was terminated two months into her role after presenting a medical diagnosis necessitating eight hours of sleep. Initially, Centerview had accommodated her need to leave assignments by midnight. However, she was later informed of her immediate termination in a Zoom call, with no option for appeal. Centerview argued that the job's demands required overnight work and justified her termination, but the court ruled that the job requirements warrant a trial.
NEW YORK TIMES
-Israel and Hamas have expressed a willingness to collaborate on President Trump's cease-fire plan, signaling a potential diplomatic breakthrough in the ongoing Gaza conflict. The Israeli government announced preparations for the "immediate implementation" of the plan's initial steps, while Hamas conditionally accepted the proposal, indicating it would release all remaining hostages. Trump expressed optimism about a forthcoming agreement but noted the necessity for negotiators to finalize the details. Key issues remain unresolved, particularly concerning Hamas's disarmament, a stipulation backed by Israel. The readiness of Israeli negotiators to engage in indirect talks with Hamas is confirmed, although the timeline for their departure remains uncertain.
-The Trump administration announced it will withhold $18B in federal funds designated for two major infrastructure projects in New York City: the expansion of the Second Avenue subway line and the construction of new commuter rail tunnels under the Hudson River. These projects aim to reduce traffic bottlenecks and enhance travel for millions in New York and surrounding areas. Currently, construction is underway on the Gateway project, a $16 billion initiative that is crucial for the Northeast Corridor's operation, connecting Washington to Boston. Transportation Secretary Sean Duffy stated that the funds will be withheld pending a review of New York State’s "discriminatory, unconstitutional contracting processes."
-The government shutdown is expected to extend at least until Friday as Senate proposals from both parties have failed, leading to a fierce standoff. The Trump administration is using the shutdown strategically to target political adversaries, labeling Democrats as "radical." This shutdown, the first in nearly seven years, has resulted in furloughs for hundreds of thousands of workers and has disrupted various government operations, such as federal court cases and assistance programs for veterans, although essential services like mail delivery and Social Security benefits continue uninterrupted.
-In May 2024, Novo Nordisk sought ethics panel approval for a liver disease trial involving its drug Ozempic, which is popular for weight loss and diabetes management. They chose WCG Clinical, an ethics board partially owned by Novo's corporate parent, which raised concerns about the independence of these panels designed to prevent unreasonable risks to trial participants. The New York Times reported that while Novo does not disclose the names of chosen review boards due to proprietary concerns, documents indicate that since its parent company's investment in WCG, the drugmaker has selected this panel for at least 46 trials, marking a significant increase from previous years.
-A bronze statue of Donald Trump and Jeffery Epstein, portraying them holding hands in a joyful pose, has been reinstalled on the National Mall after being removed by the National Park Service due to permit violations. Initially titled “Best Friends Forever,” the statue was damaged during removal, separating the figures. The artists' collective known as the Secret Handshake has taken responsibility for the installation and expressed their sentiments through a statement, comparing the statue's return to the resurgence of a toppled Confederate statue, highlighting its significance as a controversial piece of public art.
-President Trump has initiated a controversial strategy to manipulate the federal budget amid an ongoing government shutdown, withholding over $27 billion in allocated funds to retaliate against Democratic-led entities. Instead of seeking a resolution to the fiscal deadlock, the president is utilizing the situation to punish political adversaries, reduce federal expenditures, and coerce Democrats into compliance with his demands. Since the shutdown began, the administration has suspended or postponed federal assistance to 16 primarily Democratic states. A recent action involved the announcement by budget director Russell T. Vought to withhold approximately $2.1B intended for transit upgrades in Chicago, justifying this decision by alleging that the city had not adhered to non-discriminatory contracting practices.
-US Arctic research is shifting focus under the Trump administration from environmental science to military and defense interests. Experts like Michael Walsh have noted this “radical shift” toward framing Arctic issues through a national security lens. President Trump demonstrated this interest early in his term by emphasizing US control over Greenland and announcing plans for new icebreakers. He also signed executive orders to accelerate oil and gas developments in Alaska and enhance security in Arctic waterways. In a notable move, a government committee altered a Biden-era planning document to ensure alignment with current policies, omitting references to “climate change” and diminishing the role of Indigenous communities in research. The US Arctic Research Commission subsequently released a report highlighting priorities that focus on military, community, economic, and energy security, stating the region’s importance for national defense and sovereignty. This report will guide the national Arctic research plan set to begin in 2027, prioritizing national security, as affirmed by Cheryl Rosa, the deputy director of the commission.
-Discount airlines, particularly ultra low-cost carriers, initially transformed the US aviation market by providing low fares and monetizing additional services, resulting in substantial profits. However, these airlines are now facing significant challenges due to their rapid expansion, which has led to difficulties in coping with rising costs and increased competition from both fellow discount airlines and major carriers like Delta and United. Spirit Airlines, a key player in this sector, has entered bankruptcy protection for the second time in under a year, while other discount operators like Frontier are struggling with profitability despite previously stronger financial standings. Experts indicate that mainline carriers have successfully adopted strategies from discount airlines, combining competitive prices with enhanced service quality. Economists note that this has placed additional pressure on budget airlines.
NEW YORK POST
-A report suggests that a rift exists between Hamas’ political leadership and its armed wing, complicating the implementation of President Trump's peace plan aimed at ending the war with Israel. While Hamas' diplomatic arm has tentatively agreed to release Israeli hostages as part of the plan, it also seeks further negotiations on key issues. Significant opposition remains within Hamas to two major demands: disarmament and the release of nearly 50 Israeli hostages within 72 hours. Members of the Izz ad-Din al-Qassam Brigades, Hamas' military faction, are firmly against disarmament. Mediators have noted a clear division between Hamas negotiators abroad, who are more open to the Trump plan with conditions, and the militant wing, which opposes surrendering weapons or hostages without guarantees, specifically a commitment from Israel to withdraw its forces from Gaza.
-On Friday, Jon Harrison was removed from his position as Chief of Staff to the Secretary of the Navy, amidst organizational changes spearheaded by War Secretary Pete Hegseth. The War Department announced Harrison's departure, expressing gratitude for his service. A political appointee under President Trump, Harrison's dismissal is tied to his role in implementing significant changes in the Navy’s policy and budgeting offices. This restructuring occurred in anticipation of the Senate confirmation of Navy Undersecretary Hung Cao, a former Republican Senate candidate from Virginia, and aimed to curtail Cao's influence. Following the reshuffle, Secretary of the Navy John Phelan and Harrison reassigned several aides expected to support Cao and planned to vet military aides for future decisions, ensuring alignment with the secretary’s office.

The Information : ‘We’ll Double Revenue This Year’: Anduril’s CEO on Growth, Shu

‘We’ll Double Revenue This Year’: Anduril’s CEO on Growth, Shutdowns and Space War

The Takeaway
  • Anduril CEO says he expects revenue to double this year
  • The startup is scaling hardware production by 250% for autonomous defense systems.
  • Anduril’s decision to remains private has helped it invest in growth

It’s hard to think of a company that faces a bigger perception gap than Anduril. Talk to investors in Silicon Valley, and they will be clamoring to get in on its next round—last priced at $30 billion. Talk to generals and others in the traditional defense industry, and they’ll ask whether the eight-year-old company has any contracts yet. (The answer is they do.)

To get to the truth between the views, I always enjoy chatting with the company’s CEO and co-founder, Brian Schimpf, whom I interviewed on The Information’s TITV this week and find to be a very thoughtful leader.

We discussed what’s behind Anduril’s expected doubling in revenue this year, how the Trump administration is “getting their feet under them;” the government shutdown, the future of warfare and why being a publicly traded defense company leads some to “suboptimal decisions.”

I hope you enjoy.

Jessica Lessin: I am so happy to be here today with the co-founder and CEO of Anduril, Brian Schimpf. Brian, thanks for joining The Information’s TITV.

Brian Schimpf: Hey, thanks for having me on.

It’s been an incredible couple of years for Anduril. I think The Information’s TITV viewers know that Anduril, founded in 2017 now, has been in the defense space focused specifically on bringing down the cost of weapons and other items used in warfare. And as we’ll get to later, there has been a somewhat controversial company over its history. But I think now clearly is a very important moment. So I want to start by asking you about the business. I think my colleagues at The Information reported that last year your revenues were over a billion dollars and growing quickly. What’s happening to growth this year and where is it coming from?

Yeah, so we’re going to see revenue growth over 100% this year. The biggest area of increase has really been on the production side. So we’ve started making a lot more systems, fielding a lot more systems. We’re scaling the hardware production that we do by I think 250%, might actually even be a little higher this year, and expect to see a nearly similar increase next year as well.

And so let’s talk through—every day now there’s a headline about autonomous submarines in Australia, autonomous fighter jets. This might be a little further off. Where is the business now in terms of products and services and where do you think it’ll be in a couple of years?

So when we started off, we worked on a lot of things like border security, which has been a very successful business for us. We’ve had amazing bipartisan support. It started under the first Trump administration, grew tremendously under Biden and [is] continuing to grow going forward. That’s been a very mature product for us. On the counter-drone side, that’s another area where very early on we set out to kind of work on these problems and this is really scaled. We’re doing a huge amount of revenue there. We have fielded systems in combat zones. We’re seeing regular operational use. So it’s been an incredibly successful area. We’re producing a ton of surface-to-air munitions, our Roadrunner system. We’re seeing a huge amount of scale on that front as well. In the last year, we’ve kind of moved into a number of different areas as well. So one has been kind of this class of autonomous platform.

So it’s this autonomous submarine you referenced that we’ve been working on with the Royal Australian Navy. That’s now moved from a development program into a full operational production program as of just in the last couple of months. We’re working with the U.S. Air Force on their collaborative combat aircrafts. This is like a full-size fighter jet that flies along with other fighter jets to provide them support, put them out in front, put it in harm’s way so that the manned platforms don’t have to be at risk. And this is going incredibly well.

We’ll be flying in a couple of weeks here. It’s moving along at an incredible pace for an aircraft program of this complexity. We’ve moved into some space capabilities, which is really exciting. And then one of the areas that I’m particularly passionate about is the area of munitions. This is a major strategic deterrence risk for the U.S. You look at Ukraine, just the sheer volume of munitions that are consumed in that fight, I think is indicative of what the world is seeing in terms of what we need to have to deter aggression from our adversaries. And you look at the production that Russia has been able to ramp up on—it is massive and in many ways outproducing all of NATO combined on the capabilities that they’re fielding. So this is a major issue, and we’ve really focused on exactly what you said. We’re looking at lower-cost, smarter, more autonomous systems, and how can we build the best of modern manufacturing and modern technology and bring it into the defense world and be able to produce these at a huge scale?

When you talk about some of the tailwinds about getting these new items into production and also new categories, when the second Trump administration began, its message was clear, certainly to the tech industry, that it was going to cut the red tape. Has that been your experience?

All these administrations take time to get settled, right? Appointees take time to get in. They have to figure out what’s working and what’s not. They’ve got to clean up things they disagree with, and then make the plan to actually move out and move forward on what the future is. Combine this all with a fairly unprecedented budget structure, reconciliation, all these unique ways that have never occurred before, full-year continuing resolutions. Like, this is just a very unique operating environment for any administration to be able to operate in.

They’re really starting to get their feet underneath them. And what we’re seeing is, you know, a very clear-eyed focus on, where are the problems in the industrial base? What do we need to fix that are the kind of key deterrent capabilities that we need to have against our adversaries? And then really driving those hard in terms of—get results and get results now. And so I think this is a great thing, right? Like, whether that’s us or any other performer in the industrial base is exactly what we need to see: a lot of accountability, a lot of focus on the critical problems. And so I’ve been very bullish on sort of all of those fronts.

It feels like the right set of actions to take as they’re getting appointees in—this is going better. There’s more people to actually run and lead these programs. And so I’ve been very optimistic on that. On the cutting red tape and all these pieces, I think the answer is, like, anytime there’s been discrete obvious issues, so that this doesn’t make any sense, why are we doing it? We’ve had a lot of success just flagging those things and driving the resolution on it. So I think it’s just very pragmatic at the end of the day and a focus on results, which is great. That’s exactly what we want as a company that’s growing fast and just trying to deliver to the war fighter.

How does the government shutdown affect you?

You know, a lot of things slow down, right? You know, a lot of parts of [Department of Defense] are still essential. It’s brutal. I mean, you know, everyone has to play their part, I suppose. Yeah. And so, yeah, so the—you know, it’s just all the things of just the basic functioning of government. How do [you] get contracts written and sign, [how] do you get all these things executed? It all just stalls. And so if it stalls for one, two, four weeks, it’ll take, you know, several weeks to get it back online. So it does have a very meaningful impact. This, you know, progress stalls for us for the year. We were already in a position that we were pretty OK, right? So for a company like us, we’re in a pretty good spot working a lot of continuing programs. It’s fine. The bigger issue is when you’re in rapid growth and you need these new things to go, that is very, very painful. And so I think it probably impacts a lot of the newer defense players a lot more than it hits us.

At this incredibly complicated moment in foreign policy, obviously we’ve got multiple wars around the world, many of them controversial. I mean, I guess all wars are by definition, but you’ve worked across many administrations. But how is this moment in particular affecting Anduril? And how do you balance your business with the values of the U.S. government?

Yeah, so the geopolitical situation is exactly what you said. It is one of the highest periods of regional conflict. And that is frequently when you look back at World War I, World War II, regional instability started to increase, balkanization increased. You know, the amount people would arm themselves increased because you were entering an unstable world. So there’s a lot of precursors. And so that gives us just a lot of fear and pause around, is this going to get better or worse in the near-term period? What we’ve been seeing is this is a continuation of a trend that is independent of Trump, right? And the way this has played out for us has been, you know, international partners and allies really are looking to say, OK, if I’m going to increase defense funding, one, I want to know that I’m actually going to get the equipment that I’m paying for? The backlog on these orders from countries is massive. So for example the foreign military sales backlog to Taiwan is on the order of $20 billion. So, like, five to six nuclear submarines worth. It’s huge. It’s very typical. You look at, like, you want to buy Patriot missiles. It’s a two- to three-year production lead time, let alone the backlog of existing orders and the capacity saturation that exists in the system. And everyone needs these. Everyone wants these right now. And so there’s a very real fear that even if you place these orders, you commit to the U.S. and you want to have the best equipment, which the U.S. has, then you aren’t going to see it in a meaningful time frame. So there’s a lot of fear there. And that’s driving a lot of interest in ways of how do they tap into local supply chains [and] have more control over production, really, [a] lot of these sovereignty concerns. When you marry that with, I’m going to spend a lot of my GDP. I want to see a return in jobs. Like, that is a rational thing for a country to want. So we’ve been seeing just a lot of, you know, kind of shift in how the international partners are viewing this. It’s something that we’ve been very forward-leaning on.

What’s the shift?

Historically it was just buy your American and it’s all gonna work out right, and in a time when you were convinced nobody was going to attack you shoot any missiles or you weren’t really gonna need this stuff. That was all good, right? Like, if it takes five years, it’s all good. Nobody believes they have five years to wait right now. And so just this desire for speed and the urgency that everyone feels is much much higher. We see it the most with Pacific countries—you know, particularly Taiwan, Japan, South Korea. There’s a lot of feeling of urgency. We see this a lot with the European countries that are sort of closest to Russia, right? Scandinavian countries, Eastern European countries, there is a lot of urgency to solve this problem, and they want results fast.

And so there has been a very significant shift in how they view the traditional approach of how they would buy from the U.S. versus sort of where they are today. Like you said, fundamentally, we’re a U.S. company, right? We have to be aligned with U.S. policy. We want to be aligned with U.S. policy. And I think, you know, If anything, this period of instability is reminding everyone around the world that the U.S. is the ultimate backstop of global stability. Like, that is the key. And they know that those alliances with the U.S. are important. NATO does not exist without the U.S. There is not the, you know, anchor to really drive this otherwise. These other countries play a massive role.

But I think this sort of degree of U.S. relationship is very, very important. And the sophisticated policymakers can kind of see through the emotions and the frustrations of, you know, the moment of how they feel like they’re either being treated well or poorly and understand what the long arc of this looks like, which is, this is only going to work if we have a strong alliance. The U.S. is the backstop for that. There is no credible alternative. And, you know, hard power deterrence is more important than ever to ensure that backstop of stability.

And so if you had a crystal ball three years from now, what does the picture look like?

You know, it’s hard for me to imagine that there’s some deal to be done that gets, you know, Putin believing that force won’t work anymore and Xi believing everything’s going to be fine and the status quo works. I don’t see a world that happens, right? Iran is not going to stay still. They’re going to regroup, they’re going to retrench. And the view is very much that, you know, the consequences for using force are comparatively low and that undermining that Western alliance is their best chance of success.

It is hard for me to imagine that changes. I think that will look like more regional instability, more, you know, kind of in many ways you can view Ukraine, Russia as a proxy conflict. I view it as actually China’s buttressing the proxy conflict. Where do you think Ukraine is manufacturing 4 million drones? Like, they’re not making motors, they’re not making batteries. It’s all coming from China. There’s been no restriction on sales. And so the reality is going to be that this stays quite unstable. It’s hard [to] imagine getting less. And I think the imperative is the U.S. has both the capability to deter these conflicts and the will to show that there are rules and we will enforce them. And that’s ultimately [what] will create deterrence. It will create the space to allow more peaceful diplomatic negotiations to go, because people don’t believe that resorting to subterfuge, sabotage, aggressive action or even full-scale conflict will be an effective strategy.

OK, well, shifting gears slightly, Anduril, you’re a VC-backed company. I think it’s been so interesting out here in the Valley to see, first, just the skepticism towards any kind of hardware. But you’ve managed to raise a tremendous amount of capital, at upwards of a $30 billion valuation. Where do you go from here on the capital side? Do you need to raise more money? And where are you going to get it from? What do the public markets look like versus the private markets?

So growing a hardware company at the rate we’re growing at turns out to be really expensive.

When you say doubling revenue—that is not sort of, you know, we might expect that of the ChatGPTs of the world or the OpenAIs doing incredible growth, but it is worth pausing that that is fast growth in hardware.

It’s very hard to do when you’re producing physical things. And so the reality is you’re, you know, you’re building a factory one to two years before you’re getting productive utilization out of it. And that’s even like partial utilization. You get to full utilization over three to five years. You’re doing pretty good. So you’re paying for all that excess capacity up front, inventory and, like, all the working capital. It’s a concept that very few people in finance even think about anymore. It cost me money to build inventory, to sell it. These are very foreign concepts to most people in the Valley. They’re getting capex again. Yeah, they don’t understand. They get capex. Well, now we have the data centers. So they’re starting to understand that concept. Yeah, they get capex, right? And so there’s a lot of these very foreign, very traditional concepts of what it actually takes to run a business like this. So in reality, those are expensive and it’s a good problem to have, right? Like, we’re doing well, our business is succeeding, we’re scaling very fast, customers are demanding the products we have, they’re having great operational success, but it costs money. So will we raise more? You know, I think we will. In terms of where that…

I assume you’re—are you profitable?

We are not profitable yet, right. Again, growing fast, very, very expensive—if we wanted to grow at 20% or 10% a year, I’m sure we could be profitable very fast, but that’s not what we’re doing here. Where this capital comes from, you know, my view is there’s been a tremendous amount of demand flowing into the private, you know, kind of growth-stage funds. There’s a lot of interest from, you know, kind of traditionally public investors crossing over. Most of the mutual funds now cross over into those growth-stage funds. and whether they’re just directly investing or they’re providing capital into other VCs, you know, there’s just a lot of capital flowing around there. And I think the belief is that the private market returns will look a lot like the public market returns have looked like for the last 10 years. The concentration in return is very high on the top 10 companies.

If they go public, I mean, I guess we could do secondaries forever. What do you think about that? I feel like Anduril will eventually be a public company. Is that how you think about it?

I think we will. I mean, but the benefit of this, like, amazing capital market structure that exists in the U.S. is you have all the optionality in the world to make the most effective business you can.

And we can make—we are not constrained into making suboptimal decisions, we can choose the timing that actually makes sense. And for us, our belief is we’re going great. We have access to capital. We can provide liquidity to investors and employees. The demand is sufficiently high that this works out great. And so we’re not in a rush at all. But I think when we prove, you know, kind of beyond a shadow of a doubt that we can scale, we’ve got factories that produce. Our core business model is working again and again and again beyond the handful of places we’ve proved it to date. That will be trivial—easy to go public at that point. But we’re not in a rush, and we don’t need the distraction. We don’t need the volatility.

Truly, easily. I like that. Is there a benefit? Like, is it easier to get contracts if you’re a public company? Or I imagine in theory, you guys might face some restrictions because of the categories you’re in about the, you know, for instance, sovereign wealth is maybe a type of money. I don’t know if there are any sovereign wealth investors in Anduril, but I don’t even know if that would be allowed under the law. Probably not.

Yeah, there’s straightforward restrictions on who can own you and what percentage. It’s pretty simple. It’s a formula. And we’re big enough now that getting 5% of the company, it’s really expensive. Like, there isn’t 5% to 10% float sitting out there. You can’t get it. So I think these are pretty simple things for us from the compliance side.

From the kind of perception side, I think it kind of cuts both ways. So I think historically the view had been, you’re not playing in the big leagues unless you’re a public company. And I don’t think that’s the case anymore. And in fact, the message has been so consistent from the traditional players in the space that their Wall Street incentives are preventing them from investing. And by that, they are dividend stocks where they have accumulated a set of investors who expect a very consistent dividend. Heavy reinvestment, heavy risk-taking is not something that they have sold the investors on, right? And so the predictability of dividends becomes the primary driving factor of—how can they deploy their own capital into investing for growth? They’re not growth stocks, right? They’re growing at 3% to 5% per year. And so it is a different class of investor.

And I think the message of why haven’t they increased capacity on these things, why aren’t they investing is to their credit. It’s, like, unclear the return is there because they historically haven’t seen the return on investment from these things. Like, there’s a lot of reasons for that. But then there’s also a degree of shifting blame on this, which is: I can’t do it. My hands are tied by the investors. And I think that is true. I think that has created a situation where there’s a lot more skepticism of short-term incentives of the public markets. I don’t believe it has to be that way. If you are a growth stock and showing that when I invest capital, I get a good return on it, I’m pretty sure the investors are good to go with that. And they’ve overly focused. [You] get great credit for investing in growth, it turns out.

You mentioned space. Is SpaceX a competitor? What do you make of SpaceX being actually a private and very successful company with a lot of government business?

Unlike a lot of people, we’re not stupid and [we] don’t compete with SpaceX. This is the stupidest thing you could do. Like, why would you do that? Like, it’s very hard. There are—and I’m like, you’re probably gonna lose. Like, it’s just betting against Elon [Musk] is like, a really historically stupid strategy. So why would you do that? And so no, we don’t do the things SpaceX does. We’re not doing a launch. We’re not making Starlink, right? Like, we’re not doing those things. We’re working on a lot more of the DOD’s specific mission sets, right? So this is, you know, really thinking about, the future of—how does space become more of a war-fighting domain, right? Like the Chinese, the Russians have demonstrated the ability, and this has been reported in multiple cases around adversarial things they are doing in space. And so the, you know, satellites going around other satellites, potentially interfering with them, know, hypersonics, like, these orbital bombardment systems, they call them, that go around the world and then land in a specific place—like, these are very serious threats and very serious issues.

The DOD is looking at—how do I counter those? And then what are the capabilities I need to deter these things as well, to show that I can hold them at risk, so they should not mess with us either, right? And so these are the kind of categories of areas in space that we’re really focused on—the very, you know, kind of defense-specific areas that, you know, we’re uniquely going to go after and really fit in the mission of what we’re trying to do.

The Information : Bezos Calls the AI Bubble

Bezos Calls the AI Bubble

Jeff Bezos made news today, putting his imprimatur on the idea that we’re in an AI bubble, although I think the fact that he’s now sporting a light beard was just as interesting. But that’s just me. Bezos’ declaration—at an Italian tech conference—shows that the idea of a bubble is no longer much of a debate. In fact, it’s pretty much conventional wisdom. Last week, Bloomberg reported that hedge fund manager David Einhorn had warned of the chances “that a tremendous amount of capital destruction is going to come through this cycle” of AI spending.

Our story last week about Mira Murati’s Thinking Machines Lab seems to epitomize, for some observers, the bubble-like nature of things. Bloomberg columnist Matt Levine was not the only observer to quote the story’s citation of an investor describing the “absurd pitch meeting” where Murati said, “We’re doing an AI company with the best AI people, but we can’t answer any questions.” As Bezos said today in Italy, when “people get very excited as they are today about artificial intelligence, for example, is that every experiment gets funded, every company gets funded...the good ideas and the bad ideas. Investors have a hard time in the middle of this excitement distinguishing between the good ideas and the bad ideas and so that’s also probably happening today.”

If the question is no longer whether we’re in a bubble, then the real question now is when it will burst and who will survive. On the first point, that’s very hard to say. You can imagine that the failure of one of the new AI data center firms that have cropped up could trigger a correction, given how interconnected these firms are to investors, lenders and AI firms themselves. Monday’s bankruptcy filing of First Brands Group, a heavily indebted auto parts company, has raised some alarm bells on Wall Street and is the kind of thing that—happening in AI land—would send ripples everywhere.

Who’s best positioned to survive? That would be companies like chip giant Taiwan Semiconductor Manufacturing Co. that are certainly benefiting from AI but would still have a thriving business without it. Nvidia, similarly, would surely come through a correction just fine (albeit with a much lower stock price). The worst positioned are the huge number of AI startups that lack a differentiated product or sustainable business and need to keep raising money to keep the doors open. Consider that aside from OpenAI and Anthropic, only about a dozen AI startups developing models or applications generate more than $100 million in annualized revenue, we reported in August. The list of startups that don’t reach that threshold is long.

CrunchBase : The Week’s 10 Biggest Funding Rounds: Another Big Week For AI And C

The Week’s 10 Biggest Funding Rounds: Another Big Week For AI And California Startups

AI startups and California-based companies have been scooping up an outsized share of venture funding for a while now, and this past week was no exception. Leading the ranks was Cerebras Systems, as the AI processor developer and potential IPO candidate picked up $1.1 in fresh funding. Other large rounds went to companies in areas including AI, enterprise software, cybersecurity, blockchain and biotech.

1. Cerebras Systems, $1.1B, AI hardware: Cerebras Systems, a developer of AI processors, announced that it raised $1.1 billion in Series G funding at an $8.1 billion post-money valuation. Fidelity and Atreides Management led the financing for the Sunnyvale, California-based company, which filed to go public last year.

2. (tied)Periodic Labs, $300M, AI: Silicon Valley-based Periodic Labs launched with $300 million in initial funding to develop AI models for science. Venture backers include Andreessen Horowitz, Felicis, DST, NVentures and Accel.

2. (tied) Vercel, $300M, cloud infrastructure: Vercel, a developer of tools and cloud infrastructure to build websites, secured $300 million in a Series F round co-led by Accel and GIC. The financing sets a $9.3 billion valuation for the 10-year-old company.

4. Crystalys Therapeutics, $205M, biopharma: San Diego-based Crystalys Therapeutics launched with $205 million in Series A financing to support its mission of addressing the unmet medical needs of people living with gout. Novo Holdings, SR One and Catalys Pacific led the financing.

5. Flying Tulip, $200M, blockchain: Flying Tulip, a provider of blockchain financial products, said it raised $200 million in a private funding round. Backers included CoinFund, DWF Labs, FalconX, Hypersphere, and Selini.

6. CyberCube, $180M, cybersecurity: CyberCube, a provider of cyber risk management tools, said it locked up more than $180 million in an investment from Spectrum Equity. Founded in 2015, San Francisco-based CyberCube has raised at least $285 million to date, per Crunchbase data.

7. Star Therapeutics, $125M, antibody therapies: South San Francisco, California-based Star Therapeutics, a developer of antibodies for bleeding disorders and other diseases, picked up $125 million in Series D financing co-led by Sanofi Ventures and Viking Global Investors.

8. Eve, $103M, legal tech: Eve, a San Francisco-based AI platform for plaintiff law firms, landed $103 million in Series B funding at over a $1 billion valuation. Spark Capital led the financing, with participation from existing investors Andreessen Horowitz, Lightspeed Venture Partners, and Menlo Ventures.

9. Supabase, $100M, database technology: Postgres development platform Supabase announced that it closed on $100 million in Series E funding at a $5 billion valuation. Accel and Peak XV Partners led the financing for the five-year-old, San Francisco-based company.

10. DualEntry, $90M, accounting software: DualEntry, a provider of AI-enabled business accounting tools, secured $90 million in a Series A round that comes just 18 months after its launch.Lightspeed Venture Partners and Khosla Ventures led the financing for the New York-based company.