4 Predictions for the New Year

Happy New Year! When planning this edition, we had two options: 1) 2025 in review or 2) 2026 predictions. Since full Q4 data isn’t in yet, we’ll save the look-back for February. For now, grab your crystal ball, here’s what we see coming.

IPO Window Continues to Ease Open

Prediction: Multiple Major IPOs

As we highlighted in November, 2025 was better than 2023–24 for IPOs, but nowhere near the frenzy of 2020–21. We expect 2026 to build on that momentum, maybe even crack the floodgates if early movers perform well.

Names to watch? Think Databricks, Canva, Anduril, Rippling, Deel, SpaceX. All feature strong fundamentals and market dominance. If these players go out and trade well, they’ll set the tone for the rest.

Of course, macro conditions and public market stability matter. And yes, this all assumes the much-debated “AI bubble” doesn’t burst.

Zombie Reckoning

Prediction: Multiple Former Unicorns Close Up Shop

The 2021 bull market minted hundreds of unicorns, companies that soared on cheap capital and aggressive growth targets, many of which haven’t raised a dime since. Recent exits like Wealthfront (IPO) and Armis (M&A) show there’s hope for some of these former darlings: strong fundamentals and a healthy market can still deliver solid outcomes.

Others won’t be so fortunate. Valuations set in the frenzy now need to be justified, or they’ll collapse. Some are adapting: Replit is actively pivoting toward AI-driven coding tools, while companies like Socure and Checkr are benefiting from renewed demand for KYC and identity verification, much like they did during the fintech and gig economy boom.

Still, time and capital are running out for those without clear profitability or a compelling growth story. Layoffs and cost-cutting can only delay the inevitable. Some will find creative exits, but many will quietly wind down or sell for cents on the dollar. The tide that lifted them in 2021 has gone out, and unless they catch the next wave, they’ll be left stranded.

Mega-Cap AI Funding Isn’t Done

Prediction: OpenAI Raises $100B and Anthropic / xAI Keep Pace

After OpenAI CEO Sam Altman declared a “code red” following Google’s Gemini surge, reports suggest OpenAI is in talks to raise $100B, a staggering figure even by AI standards. This would come on the heels of its $40B round in March 2025, underscoring the capital intensity of the model arms race.

Despite Gemini’s momentum and Google’s search dominance, OpenAI still commands the consumer AI crown. We expect this raise to close, given sovereign wealth funds and hyperscalers eager to secure compute and distribution advantages.

Anthropic and xAI won’t sit idle. Both raised double-digit billions in 2025, and we anticipate follow-on mega-rounds: Anthropic to fortify its enterprise edge, xAI to leverage real-time data via X as a wedge into corporate workflows.

For now, these companies look like “just chatbots,” but behind the scenes they’re building full-stack ecosystems: agent orchestration, enterprise integrations, proprietary data layers, and infrastructure plays. These moves position them not only as AI leaders but as future IPO heavyweights, names that could swing the public market narrative if they choose to list.

AI App Layer on Watch

Prediction: Some High Flyers Fall

Over the past couple of years, companies like Lovable, Fireworks AI, Cursor, Replit, and Together AI have built slick “wrapper” apps and agentic platforms on top of foundation models. Many boast triple-digit ARR growth and have attracted massive VC checks. We’re not putting any of these names on a doom list, but the reality is that some in this wide spanning category won’t make it, despite early success.

The biggest risk? Whether the giants step in and make them obsolete. These companies complement the core models, but their margins will never beat the source they pay to access. If OpenAI or Anthropic roll out similar products, survival will hinge on meaningful differentiation: data moats, workflow depth, or distribution advantages.

A recent example illustrates the dynamic: Nvidia’s acquisition of Groq for inference. On one hand, it shows a possible path to exit for companies with strong technical differentiation. Groq was valuable enough that Nvidia chose to buy rather than build.

On the other hand, it reshapes the market for inference players like Fireworks AI and Together AI. Not a death sentence, but a signal: when giants internalize capabilities, the bar for independence rises sharply.

Why this matters: These trends aren’t just headlines. They shape liquidity, valuations, and strategic decisions across the startup ecosystem. IPO timing will influence private market sentiment, mega AI rounds will dictate capital allocation, and the shakeout of 2021 unicorns and app-layer AI players will reset expectations for growth and defensibility. For anyone holding options or planning their next move, understanding these dynamics is critical as the market enters another volatile, opportunity-rich cycle.

December's Top Ten:

1. Anthropic plans to buy Bun

   Anthropic is reportedly planning to acquire Bun as it pushes deeper into developer tooling and application workflows. The move signals a broader strategy shift toward owning distribution and usage surfaces rather than competing purely on model performance.

2. ServiceNow is acquiring Armis

   ServiceNow has agreed to acquire cybersecurity startup Armis for $7.75 billion in cash, significantly expanding its security and risk management portfolio ahead of broader AI-driven enterprise defense demand. The acquisition underscores the growing priority of integrated cybersecurity capabilities as platforms absorb real-time visibility, risk prioritization, and remediation workflows.

3. K2 Space set to quadruple valuation

   K2 Space is set to raise at roughly four times its prior valuation as investor appetite for defense and space infrastructure continues to outpace broader private market sentiment. Capital is still flowing aggressively toward assets tied to national security and resilient communications.

4. SpaceX aiming for 2026 IPO

   SpaceX is targeting a potential 2026 IPO, which would mark one of the largest and most closely watched public offerings in tech history. Any concrete movement toward liquidity would have meaningful implications for late-stage pricing and secondary activity.

5. OpenEvidence in talks to raise at a $12B valuation

   OpenEvidence is in discussions to raise new funding at a $12B valuation as vertical AI platforms with real usage continue to command premium pricing. The deal highlights how domain specificity is becoming a key differentiator in AI investing.

6. Waymo discusses raising billions at over $100B valuation

   Waymo is reportedly discussing a multi-billion-dollar raise at a valuation north of $100B, resetting expectations for autonomous vehicle assets many investors had written off. A deal at this level would represent a sharp sentiment reversal for autonomy.

7. Wealthfront NASDAQ debut

   Wealthfront completed its IPO and began trading on the Nasdaq under the ticker WLTH on December 12, 2025, pricing 34.6 million shares at $14 each and raising about $485 million while achieving a valuation of roughly $2.6 billion on debut. The company’s flat initial trading performance underscores the selective appetite for fintech listings even as the broader market sees more public exits, and positions Wealthfront’s automated wealth platform as one of the first robo-advisor fintechs to scale through a public listing in the current cycle.

8. OpenAI on track to top $13B in revenue

   OpenAI is on track to surpass $13B in annualized revenue, putting it in rare territory relative to historical SaaS growth curves. The pace matters less for precision and more for anchoring what platform-scale AI economics now look like.

9. Alphabet to buy Intersect for $4.75B

   Alphabet has agreed to acquire data center developer Intersect for $4.75B, reinforcing how physical infrastructure has become a strategic input to AI expansion. Power and capacity are increasingly as critical as model innovation.

10. Nvidia to buy Groq for $20B

    Nvidia is in talks around a $20B acquisition of Groq as it looks to further consolidate control over AI compute and inference economics. The deal reads as a buy-rather-than-build move to prevent alternative architectures from scaling independently.

    Why It Matters:

    December was defined by an aggressive reacceleration of capital toward scale, control, and infrastructure, with incumbents leaning in rather than waiting out uncertainty. AI leaders moved to consolidate distribution and compute through large strategic investments and acquisitions, hyperscalers competed to lock in privileged access to frontier models, and late stage private companies continued to command premium valuations tied to real usage and revenue growth. At the same time, physical constraints like data centers, power, identity, and security emerged as critical choke points, driving M&A activity and reframing what durable advantage looks like going into 2026.

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