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Open AI, Q1 Earnings, & VC Outlook

Will Open AI stay on top and will the US continue dominating VC?

Deepdive

📊 Big Tech, Big Checks — What Q1 Earnings Are Really Telling Us

Big Tech mostly delivered in Q1, with Nvidia’s 69% revenue pop and Netflix’s monster EPS leading the charge. Tesla missed the mark, but the rest are doubling down on AI, cloud, and buybacks — spending like it’s 2021, but with better unit economics.

Below is a summary table of the Q1 2025 earnings for Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, NVIDIA, and Tesla.

Company

Rev ($B) &

YoY Growth

EPS ($)

Beat Expectations (Y/N)

Meta

$42.3; 16%

$4.39

Y

Microsoft

$70.1; 13%

$3.46

Y

Netflix

$10.5; 13%

$6.61

Y

Alphabet

$90.2; 12%

$2.81

Y

Amazon

$155.7; 9%

$1.59

Y

Apple

$95.4; 5%

$1.65

Y

Tesla

$19.3; (9%)

$0.27

N

Nvidia

$44.1; 69%

$0.81

Y

S&P 500

N/A; 12%

N/A

N/A

Q1 Updates:

Meta is planning $64B to $72B in 2025 capex focused on AI infrastructure, data centers, and hardware.
Microsoft is committing $80B to technical infrastructure in 2025.
Netflix is prioritizing profitability with around $8B in free cash flow.
Alphabet has earmarked $75B for global technical infrastructure and network expansion.
Amazon leads the capex pack with $88B dedicated to technology infrastructure and global network investments.
Apple is returning capital with a massive $100B stock buyback instead of ramping up spending.
Tesla plans $11B in 2025 capex, though Q1 spending fell 46% YoY to $1.5B.
Nvidia will spend $3.2B in capex for 2025 and returned $7.8B to shareholders in Q1.
S&P 500 showed solid market-wide momentum with 11.76% YoY growth.

2025 Outlook: Tech in 2025 is racing ahead, fueled by AI, cloud, and digital ads, with giants like NVIDIA, Microsoft, and Alphabet throwing money at innovation like it’s a post-earnings party. Most of Big Tech is riding high, grinning like the rally has no brakes. But don’t pop the champagne just yet—tariffs, trade tensions, and tangled supply chains could spoil the mood. Tesla’s keeping it chill, Meta’s pinching pennies, and lurking risks like inflation and regulation might just crash the AI parade.

Notes: 1) Financials are reported in billions of USD. 2) Revenue Growth (YoY) reflects the percentage change from Q1 2024 to Q1 2025 for companies. 3) For the S&P 500, it represents the YoY change in its value from May 2024 to May 2025. 4) Beat Expectations indicates whether the company exceeded analyst forecasts for revenue and/or EPS. 5) Sources: earnings presentations, call transcripts, press releases

Weekly Highlights

🤖 Big Brains, Bigger Bills — Can OpenAI Stay on Top?

1) The Backstory:
OpenAI, Anthropic, and xAI have built some of the most powerful AI models on the planet. They’ve also burned through a staggering $95 billion to do it. While these companies generate a combined $12 billion in revenue, cracks are forming. Why? Because a new wave of cheaper, open-source, and internationally developed models is gaining ground — fast.

2) What’s Happening:
China’s DeepSeek and other leaner players are releasing competitive models at a fraction of the cost. Mary Meeker recently flagged this shift, warning that America’s AI giants may get disrupted not by better tech, but by more efficient economics. As enterprises prioritize cost and customization, the “bigger is better” approach may be losing steam.

3) Why It Matters:
The AI arms race isn’t just about intelligence — it’s about margins. If OpenAI & co. don’t adapt, they risk being overtaken by nimbler challengers. The future may favor AI that’s not just smart, but scrappy.

Sources: Mary Meeker says cheaper rivals like DeepSeek could undercut OpenAI’s costly dominance. FT | Reuters

🦄 The Money Is Back, Baby — And It Brought a Loan Officer

1) The Backstory:
Global VC once felt borderless. Now? Not so much. With capital getting choosier and AI/climate tech demanding deep pockets, U.S. startups are back in the spotlight — and raising cash with more than just equity.

2) What’s Happening:
In Q1 2025, U.S. startups snagged 71% of global VC funding — $55B went to the Bay Area alone. At the same time, venture debt is booming, expected to hit $27.8B this year. Startups, especially in capital-heavy sectors, are using it to scale without giving up more equity.

3) Why It Matters:
This signals a smarter capital strategy: equity + debt = growth without dilution. The U.S. is reasserting itself not just with big rounds, but with financial flexibility. For founders, debt isn’t a dirty word anymore — it’s a power move.

Sources: In Q1 2025, U.S. startups secured $80B—71% of global funding—with Bay Area firms attracting $55B; concurrently, the U.S. venture debt market is projected to reach $27.83B this year. StoryPitchDecks | InvestorWire

💰 Private Equity and Venture Capital: A 2024 Snapshot

1) The Backstory:

Private equity (PE) and venture capital (VC) took a rollercoaster ride recently. PE dealmaking nosedived in 2022-23—blame high interest rates and global chaos—while VC fundraising slumped 24% in 2024. But PE staged a comeback with $2 trillion in deals last year. VC? Still finding its footing.

2) What’s Happening:

PE’s roaring back, boasting $2 trillion in deals (up 14%), while VC’s deal count cratered 16.9%. Cash is flowing again via distributions, and general partners are leaning on alternative capital like co-investments. Exits remain jammed, though—unsold assets are stacking up. Secondaries ($162 billion) and GP stakes are the slick new ways to unlock liquidity.

3) Why It Matters:

Startups, brace for a VC chill—funding’s scarce and selective. Growth equity folks, stress-test those exit plans. PE’s thriving, but staying ahead means embracing alt capital and secondaries. Innovation’s the name of the game.

Graph: Exhibit 1 (PE deal value by region)—it screams comeback.

Latest Fundraises from Major Firms (PE, VC, and Institutional Investors)

  • Venture Capital

    • M25, a Chicago-based venture capital firm, raised $36.5 million for Fund IV, which is focused on early-stage tech startups.

    • Metalayer VC, a new venture capital firm, launched Fund I with $25 million, which targets blockchain infrastructure startups.

    • Scribble Ventures raised $80 million for its third fund.

    • MFV Partners, a VC firm backed by Chicago’s wealthy, launched a $25 million fund to invest in early-stage UChicago quantum computing and AI startups.

    • Factorial Funds raised $200 million for its second fund.

    • QuantumLight, an AI-driven venture capital firm founded by Revolut CEO Nik Storonsky, raised $250 million for its debut fund.

    • Emil Capital Partners raised $100 million for its fourth fund and rebranded as ECP Growth.

  • Growth Equity

    • Vista Equity Partners raises $4.0 billion for its continuation fund for Cloud Software group, which is expected to close this summer.

  • Private Equity

    • Terminus Capital, a PE firm, raised $250 million for its debut fund.

    • Aliph Capital, the first woman-led PE firm in the Gulf, raised $200 million for its debut fund.

    • Schroders Capital raised ~$2.3 billion for its sub-investment grade infrastructure debt fund.

    • Crestline Investors raised $1.7 billion for its third dedicated NAV financing fund, the Portfolio Finance Sentry Fund.

    • Arena Investors raised $1.091 billion for its third Special Opportunities Partners Fund.

    • Goldman Sachs is marketing its tenth secondaries fund, targeting a raise above the $14.2 billion gathered for its previous fund.

    • Thoma Bravo raised $34.4 billion across three funds: $24.3 billion for its sixteenth flagship buyout fund, $8.1 billion for its fifth mid-market fund, and €1.8 billion for its first Europe-focused fund.

Top Jobs

Venture Capital roles

Analyst at 16VC (San Francisco, CA)

Senior Associate/AVP at Temasek (San Francisco, CA)

Analyst at Hitachi Ventures (Boston, MA)

Analyst at TDK Ventures (San Jose, CA)

Analyst/Associate/Sr. Associate at Moneta Ventures (Austin, TX)

Summer Analyst at Red Beard Ventures (New York, NY)

Associate at SpringTide Ventures (Salt Lake City, UT)

Growth Equity Roles

Associate at Sands Capital (Arlington, VA)

Analyst at KKR Growth (New York, NY)

Sourcing Analyst at PSG (Boston, MA)

Research Analyst at Stripes (New York, NY)

Private Equity (Buyout) Roles

Analyst/Associate at Apollo (New York, NY)

CoS Roles

Chief of Staff at Sevenstarling (Remote)

Chief of Staff at Flex (NYC)

Business Operations Roles

Head of Finance & Ops at Tavus (SF / NYC)

Business Operations, API Pricing at OpenAI (SF / Hybrid)

Strategic Operations Lead at Mercury (SF / NYC / Remote)

Operations Lead at Datology (Redwood City, CA)

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