Silicon Valley’s venture capital scene is in the midst of sweeping change as investors adapt to global economic headwinds, advances in artificial intelligence, and growing scrutiny around wealth distribution, diversity, and sector focus. According to the Korea Economic Daily, Vinod Khosla recently addressed listeners at TechCrunch Disruption 2025, describing an industry on the brink of transformation, driven by the explosive impact of AI. Khosla argues that “the wealth created by AI should belong to everyone,” even proposing that governments could hold equity in all listed companies to prevent further inequality as AI accelerates productivity and disrupts job markets. He says the biggest challenge of the AI era now is fair distribution, not just technological innovation. Khosla also predicts that by 2035, a third of the Fortune 500 may disappear, outpaced by new startups born from rapid technological shifts in fields like autonomous coding and AI-driven professional services.

This bold vision is playing out on the ground. MLQ.ai reports that Substrate, a Peter Thiel-backed chip startup, just closed a funding round exceeding $100 million, highlighting persistent investor appetite for deep tech and semiconductor manufacturing as Silicon Valley eyes less reliance on global supply chains. Meanwhile, as chronicled by Long Journey Ventures, Substrate is planning a $10 billion semiconductor plant in Texas, aiming to challenge industry Goliaths like ASML and TSMC. This bet on hardware underscores the venture mood that American technological sovereignty is now mission-critical.

TechCrunch spotlights founders like the Black women-led fintech startup Cyphr, which leverages AI to modernize small-business lending and has raised $1 million. Cyphr’s story echoes a quiet but vital trend: increased, if still challenging, traction for diverse founders building in overlooked sectors. CEO Jannae Gammage credits the AI revolution for opening doors with lenders and investors, though she acknowledges the continued struggle for minority-led startups to achieve equal funding opportunities.

The cybersecurity sector is another hotspot. SiliconANGLE reports that three startups, including Sublime Security and ConductorOne, recently raised rounds that pushed sector deal volume to a three-year high. Sublime’s $150 million round was led by prominent firms like Georgian and Citigroup’s venture arm, and centered around AI-driven threat detection. ConductorOne’s $79 million round, led by Greycroft and joined by CrowdStrike’s Falcon Fund, focuses on AI-powered identity management. Both startups serve a client base that includes industry giants like Spotify and Zscaler, reflecting how enterprise security remains a venture staple amid mounting cyber threats and regulatory demands.

General Catalyst, one of Silicon Valley’s marquee VC firms, is looking beyond traditional tech, as reported by The Daily Upside. In a move that signals broader cross-sector ambition, it has joined with activist investor Nelson Peltz to make a $7 billion bid to take UK’s Janus Henderson private, betting that away from the pressures of public markets, the firm can focus on longer-term tech innovation.

Climate tech and connectivity are also ascendant. Satnews notes Hubble Network’s $70 million Series B round, which will help scale global satellite IoT at lower costs. Such deals highlight how investment is shifting toward infrastructure for planet-scale challenges, from climate resilience to next-gen telecom.

Sequoia Capital’s Roelof Botha recently offered a note of caution at TechCrunch Disrupt, warning that too many players are crowding into venture investing, diluting potential returns and raising questions about the industry’s long-term health, as reported by the SF Business Times.

Venture capital in Silicon Valley is thus at a pivotal crossroads. Investment is chasing AI at every layer, hardware and...