Fed Blinks, Markets Cheer?

Written By Carlos Ochoa
 

Week of September 22nd, 2025

Welcome to AI8’s weekly newsletter, your ultimate source for curated insights and updates from the dynamic world of venture capital!

We’ve scoured the vast landscape of the web to bring you a comprehensive roundup of the industry’s top news articles, all in one convenient place. We keep you ahead of the game and in the know about all things related to the vibrant world of investments

 
 

STARTUPS

 

ROUNDS AND UNICORNS


The Week’s 10 Biggest Funding Rounds: AI And Robotics Headline Busy Week For Dealmaking (Crunchbase, 5 minute read) 

  • Figure (Robotics): San Jose, California-based Figure, the developer of general purpose humanoid robots, announced that it raised $1 billion in Series C financing. The round, led by Parkway Venture Capital, set a $39 billion post-money valuation for the company 

  • Groq (AI): Groq, a provider of cloud and on-premise AI compute centers that is also designing chips called LPUs, or language processing units, landed $750 million in a new round led by Disruptive. The financing sets a $6.9 billion post-money valuation for the Mountain View, California-based company 

  • Divergent (Manufacturing Technology): Torrance, California-based Divergent Technologies, developer of a digital manufacturing platform, closed a $290 million Series E financing at a $2.3 billion valuation. The round, led by Rochefort Asset Management, consisted of $250 million in equity and $40 million in debt financing 

  • Lila Sciences (AI): Lila Sciences, a developer of AI tools for use in science, locked up $235 million in Series A funding. Braidwell and Collective Global led the financing for the Cambridge, Massachusetts-based company 

  • Dyna Robotics (Robotics): Redwood City, California-based Dyna Robotics, developer of a foundation model for robots to perform daily tasks, said it secured $120 million in a Series A round co-led by Robostrategy, CRV and First Round Capital 

Silicon Valley bets big on ‘environments’ to train AI agents (TechCrunch, 4 minute read) 

Reinforcement learning (RL) environments — simulations that let AI agents practice tasks like navigating software or browsing the web — are becoming a hot frontier in AI. Unlike static datasets, these environments must anticipate unpredictable behavior and provide feedback, making them complex to build. Big data firms are leading the push: Surge spun up a dedicated RL unit after generating $1.2B in 2024 revenue, while Mercor, now valued at $10B, is pitching investors on domain-specific environments for coding, healthcare, and law 

  • Demand is surging: AI labs are building RL environments in-house and may spend over $1B on them next year, while also turning to outside vendors 

  • A wave of startups is emerging too. Mechanize, launched just six months ago, is working with Anthropic on RL coding environments and luring top engineers with $500K salaries 

  • The big question: Can RL environments scale? They’ve enabled breakthroughs like OpenAI’s o1 and Claude Opus 4, but training is costly, prone to reward hacking, and critics warn the space is crowded and fragile 

Trump says Lachlan and Rupert Murdoch might invest in TikTok deal (TechCrunch, 2 minute read) 

The Trump administration says a long-anticipated deal to spin off TikTok’s U.S. operations under majority American ownership is close to completion. President Trump told Fox News that Rupert and Lachlan Murdoch, Larry Ellison, and Michael Dell are likely participants, while reports confirm Oracle, Andreessen Horowitz, and Silver Lake will also invest. Under the plan, Americans would control six of seven board seats, the app’s algorithm would be U.S.-run, and ByteDance’s stake would fall below 20% 

  • The deal follows a federal law requiring TikTok’s U.S. sale after national security concerns briefly forced the app offline earlier this year 

  • Trump has repeatedly extended ByteDance’s sale deadline while negotiations continued 

  • He also said China’s President Xi Jinping approved the arrangement, with TikTok thanking both leaders for ensuring the app’s survival in the U.S. 

Compared to a year ago, more VC cash is going to bridge rounds (Carta, 4 minute read) 

Bridge rounds — interim financings that extend a startup’s runway without setting a new valuation — are rising again. In Q2 2025, 16.6% of all startup cash raised on Carta came from bridge rounds, up from 11.8% a year earlier and well above the sub-10% share seen during the 2021 bull market. They’re especially common at the Series A (22.5%) and Series D (20%+) stages 

  • The trend reflects tight capital markets, with U.S. IPOs down 62% from 2021 to 2024 and new venture rounds down 36% 

  • Investors are pickier, so startups are using bridge rounds to extend runway. The gap between main funding rounds has grown to 696 days (23 months), up from about 600 days two years ago 

  • Investors note this is a symptom of weak IPO and M&A markets, not a permanent shift: once exits and valuations recover, startups and VCs will prefer traditional priced rounds and exits to generate returns

 
 
 
 

ECONOMIC SNAPSHOT

 

Fed Rate Cuts vs. Other G7 Countries (Visual Capitalist, 2 minute read) 

The Federal Reserve cut rates by 0.25 points on Sept. 17, its first move in nine months, bringing total cuts since early 2024 to -1.25 percentage points. While most G7 central banks have been easing aggressively — Canada by -2.5 points and the Euro area by -2.5 points — the U.S. has moved more cautiously, leaving its benchmark rate at 4.0%–4.25%, the highest in the G7. Only Japan is still hiking, with rates now at 0.6%. The Fed cited slowing job growth as the key driver: just 22,000 jobs were added in August, far below expectations 

  • Inflation remains sticky, with the PCE index at 2.6% in July. A recent survey also showed that Americans rank the cost of living as their top personal challenge 

  • By year-end, the Fed expects rates to fall further to 3.5%–3.75%, signaling at least another half-point cut 

  • For businesses, borrowing costs remain high compared to peers, but loan rates should ease gradually. Investors still see the U.S. as offering the highest safe yields among G7 economies

 
 

Charted: U.S. Interest Rates Over Time (1954-2025) (Visual Capitalist, 3 minute read) 

The U.S. Federal Funds Rate has gone through wide cycles over the past seven decades, reflecting shifting economic pressures. In the Volcker era of the early 1980s, rates spiked above 19% to crush double-digit inflation, triggering a deep recession but restoring price stability. In contrast, after the 2008 financial crisis, rates were slashed to 0.00–0.25%, a near-zero policy that persisted for nearly a decade. A similar move followed during the COVID-19 pandemic, when the Fed again returned to emergency low rates to keep the economy afloat 

  • The most recent cycle saw an aggressive tightening in 2022–23, as inflation surged to a 40-year high 

  • The Fed raised rates to 5.25–5.50%, the highest since 2001, before easing late in 2024 with three cuts that brought the rate down to 4.25–4.50% 

  • On Sept. 17, 2025, the Fed cut again by 0.25 points to 4.00–4.25%, its first move this year, and projects at least two more cuts by year-end 

  • The U.S. is easing rates more slowly than Canada and the Eurozone, but the shift shows the Fed is moving from fighting inflation to supporting a weakening job market after weak August data

 
 

Wall Street got the rate cut it wanted. Can the optimism last? (CNN, 4 minute read) 

U.S. stocks are surging to record highs after the Fed’s first rate cut since December, with the Dow, S&P 500, and Nasdaq all setting back-to-back records. The S&P 500 is up 13% YTD, and smaller companies are rallying too, with the Russell 2000 up 40% since April. Investors are betting on a continued rate-cutting cycle — the Fed’s dot plot signals two more cuts this year — and strong corporate earnings (81% of S&P 500 companies beat Q2 estimates). Still, risks loom 

  • Analysts warn the market looks “priced to perfection”, with stocks at high valuations and concerns mounting about tariffs, sticky inflation, and a weakening labor market 

  • Experts say the bull market may keep grinding higher unless profits falter or a bigger economic shock arrives 

  • But they caution that the disconnect between Wall Street optimism and Main Street realities could trigger a pullback 

Trump’s $100,000 H-1B visa fee could hurt US growth, economists warn (The Guardian, 4 minute read) 

President Trump has imposed a new $100,000 fee on H-1B visas, a 60x increase aimed at pushing companies to hire more Americans. Economists warn the move could slow U.S. growth by driving away skilled foreign talent, especially engineers and scientists from India, and worsening a potential “brain drain.” Big tech firms like Amazon, Microsoft, Meta, Apple, and Google—the largest H-1B employers—can absorb the cost, but other sectors such as healthcare and education may struggle 

  • Analysts say the policy adds to existing economic headwinds from tariffs, political uncertainty, and fiscal strain, raising long-term risks of weaker growth, a softer dollar, and higher borrowing costs 

  • The announcement sparked chaos in Silicon Valley, with companies warning staff against international travel until the White House clarified the fee is a one-off charge for new applicants only 

  • Berenberg cut its 2025 U.S. growth forecast from 2% to 1.5%, warning even that may prove optimistic if restrictive immigration policies persist

 
 

IPO & EXITS

 

Secondary stake sales smash records (Pitchbook, 2 minute read) 

Secondary sales of private capital fund stakes are surging to record levels as LPs seek liquidity and trim underperformers, according to PitchBook’s Q3 2025 report. While historically dominated by mature PE buyout funds, the market is increasingly seeing venture, private credit, infrastructure, and real estate fund stakes. After a record $160B in secondary sales in 2024, 2025 is on track for another high, with secondaries AUM projected to reach $1T by 2030 

  • Investors are trading more VC fund stakes earlier in a fund’s life cycle, chasing higher return potential but negotiating steeper discounts for added risk 

  • Specialists like StepStone argue quality matters, with top-tier startups worth paying up for while weaker portfolios drag pricing down 

  • With secondary sales now surpassing IPO proceeds, LPs are using the market to redeploy capital into newer vintages with stronger return prospects

 
 

Top Amazon reseller Pattern opens at $13.50 in Nasdaq debut after IPO raised $300 million (CNBC, 2 minute read) 

Pattern Group (Nasdaq: PTRN), the No. 2 Amazon seller in the U.S., debuted Friday with shares rising 11% to $15.63, valuing the company at $2.5B and raising $300M. Founded in 2013, the Utah-based “ecommerce accelerator” helps 200+ brands like Nestlé, Panasonic, and Skechers sell across Amazon, Walmart, Target, and TikTok Shop. In Q2 2025, revenue grew 39% to $598M, with net income of $16.4M 

  • Pattern’s growth comes as IPO markets heat up, alongside debuts from Klarna, Gemini, and Figma 

  • But risks loom: 94% of revenue comes from Amazon sales, leaving it highly dependent on the platform, while U.S.–China tariff tensions threaten pricing and demand 

  • CEO David Wright said tariffs delayed the IPO but stressed Amazon remains a “great partner” so long as sellers stay compliant 

Netskope’s listing, an increasing rarity in cybersecurity, sees gains on 1st day (Pitchbook, 2 minute read) 

Netskope debuted on the Nasdaq at $19/share, raising $908M, and closed its first day at $22.49 (+18%), giving it an $8.6B market cap. Founded in 2012, the cloud security firm reported $328.5M in H1 2025 revenue and $169.5M in losses. Major backers Lightspeed (16.9% stake) and Iconiq (16.8%) saw their holdings valued at over $1.4B each 

  • Despite the strong debut, investors warn cybersecurity IPOs remain rare, with only four expected in 2025 — matching last year’s six-year low 

  • M&A continues to dominate as large customers stick with established vendors like Palo Alto Networks 

  • Netskope’s listing follows a string of post–Labor Day IPOs, including Klarna, Gemini, Via, and Figure, highlighting the broader rebound in tech offerings

 
 
 
 

WHAT A TIME TO BE ALIVE

 

The Gender Pay Gap Is Growing Again: Why Efforts to Close It Are Falling Short (Investopedia, 3 minute read) 

The gender wage gap in the U.S. widened in 2024, with women earning 80.9% of men’s median pay, down from 82.7% in 2023, according to Census Bureau data. Men’s pay rose 3.7% to $71,090, while women’s increased only 1.5% to $57,520. The only groups whose earnings fell were Black workers (-1.8%) and those with a Bachelor’s degree or higher (-0.5%). So far in 2025, the trend has slightly reversed: women now earn about 82% of men’s weekly pay, up from 81.8% a year ago, but still below the mid-2023 peak of 84.6% 

  • Demographic shifts, such as Baby Boomer retirements, may also widen the gap as promotions more often go to younger men 

  • The wage gap has narrowed significantly since the 1960s, but remains stubborn

 
 
 
 

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Happy reading,

8alpha.ai’s Research & Investment Team

 
Carlos Ochoa
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