Where eight top VCs are putting their chips for 2025, and more tech and AI news this week

Welcome back to LinkedIn News Tech Stack, which brings you news, insights and trends involving the founders, investors and companies on the cutting edge of technology, by Tech Editor Tanya Dua. You can check out our previous editions here and here.

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A deep dive into one big theme or news story every week.

Last week, we outlined seven key predictions from our editors and experts for where AI is headed in 2025 — a year that might see Nvidia’s dominance start to be challenged and fractional chief AI officers rise to the mantle.

But what do the people holding the purse strings think? Venture capitalists bring a unique vantage point: they spot trends before they go mainstream, place bets on ambitious ideas and often serve as the earliest champions — or critics — of what’s next.

For our hundredth edition 🥳 (and the last one for the year — stay tuned for a refreshed look in 2025), we polled a handful of top VCs to share their predictions for the year ahead. From where AI and the venture capital industry is headed to which companies are poised to follow in ServiceTitan ’s footsteps and IPO, here’s where they’re putting their chips for 2025.

Praveen Akkiraju, managing director, Insight Partners

“The most exciting development will be the opportunity to use highly capable state-of-the-art reasoning LLMs to enable agentic applications that address progressive complex business workflows. Agent orchestration frameworks will combine LLMs and ‘scaffolding’ such as memory, function/tool calling, and computer use with appropriate guardrails and evals to build AI agents that will unlock enormous customer value. We are particularly interested in verticals where there are highly technical and complex tasks, unique data sources and where the incumbent is struggling to keep pace with innovation.”

Navin Chaddha, managing partner, Mayfield Fund

“I believe both IPOs and M&A activity will pick up significantly in 2025 and reach the pre-pandemic levels of 2018-19. We will likely see a surge in exits as companies that have been waiting for more favorable market conditions either finally go public or get acquired. Databricks, Klarna, Solera, Stripe, CoreWeave, Discord and Cohesity are a few I’m watching closely.”

Jenny Fielding, co-founder and managing partner, Everywhere Ventures

“Sure, 30 VC funds raised 75% of all venture capital in the US in 2024, but I still think betting on small funds is better. Not only can small funds out-perform for LPs but they are more aligned with founders which is just better for the whole system.

Having fewer assets under management means less management fees to run the business, and it's sometimes kind of tight. But it also means that small funds are more like startups, operating in founder mode, staying focused and hungry to win.

Raising money from LPs is even harder now with the big VCs scooping up much of the cash, but if we expect our founders to be able to raise in tough markets, so should we.” 

Cathy Gao, partner, Sapphire Ventures

“In today's (venture capital) market, size doesn’t win–specialization does. Founders value partners who deeply understand their business, market and unique challenges. The firms driving returns are those with a sharp focus on stage, sector and business model. A focused strategy compounds over time. Deep expertise not only helps firms identify winners in crowded fields like AI but also creates a virtuous cycle.

Of course, size does play a role. Funds must be thoughtfully sized to compete. Round sizes have exploded – what was a $30 million Series C in 2017 is now often $100 million-plus. Firms need enough capital to participate effectively at their stage, without oversizing and risking diluted focus or lower returns.The future of VC belongs to those who are sharp, focused and right-sized.”

Mo Jomaa, partner, CapitalG 

"I predict that in 2025 we will continue to see open-source technologies consume the infrastructure layer in software. We have seen this trend play out in several categories already, including data and analytics (which led to our investment in Databricks) and observability (which drove our investment in Grafana). Enterprises will continue to adopt open-source because it helps them save money, avoid vendor lock-in and shape the product roadmaps of the technologies that they procure."

Rebecca Lynn, co-founder and general partner, Canvas Ventures

“The VC ecosystem has quadrupled, with there being less than 1,000 VC firms when I started to  3,417 VC firms by the end of 2023. And the truth is, very few of them have actual returns to show out there. With the amount of firms going out to raise capital next year, we’re in for a pretty big contraction. Not everyone will survive, and we’ll see a lot of consolidation.”

Megan Reynolds, principal, Vertex Ventures US

“There is an expectation across VCs that the IPO market will reopen in 2025 — and the strong early performance of the recent ServiceTitan IPO has cemented that view. Wall Street is hungry for tech IPOs, but the largest and fastest growing companies don’t seem to feel the pressure. Databricks raising $10 billion at a $62 billion valuation as a Series J is a firm IPO rejection for now. Wall Street might be hungry but that doesn’t mean that Databricks and comparable high-growth tech companies will go down that route. They are well fed and have so much private capital available to them — it doesn’t seem like they’re feeling the pressure to IPO.”

Dharmesh Thakker, general partner, Battery Ventures 

“We will see the worlds of software and hardware merge as silicon and software come together to accelerate the AI cycle. We could also see one of the cloud giants buy Intel to design their own chips, while Nvidia launches their own cloud or software offering or buys one of the smaller ones.” 

Here’s where we bring you up to speed with the latest advancements from the world of AI.

• Databricks nabs $10 billion in VC funding. Among the largest-ever venture capital funding rounds, the new infusion has pumped the data, analytics and AI firm’s valuation to $62 billion — making it one of the world's biggest privately held companies. The funding will be used to scout new talent, make acquisitions and buy out employee shares, CNBC notes. The company is also forecasting positive free cash flow for the first time, as well as passing $3 billion in estimated future revenue in the fourth quarter. As for the possibility of going public, CEO Ali Ghodsi has said it might happen mid-2025.
• Google debuts latest AI video model. Not to be outdone by OpenAI — which just announced an expanded ChatGPT search function — Google has unveiled the newest version of its Veo AI video model. The release comes just a week after OpenAI rolled out its own text-to-video tool, Sora. According to Google's DeepMind AI research branch, Veo 2 offers higher resolution, greater control over camera angles and "less frequent" hallucinations than other AI video generation models. Last week, Google also unveiled Gemini 2.0 —  which, according to CEO Sundar Pichai, can “think multiple steps ahead, and take action on your behalf, with your supervision.” Many of the new features are available through Google’s AI agent prototype, “which can chat like a person and make sense of the physical world as a virtual butler,” Wired writes. Things haven’t exactly been smooth sailing, however, with Gemini facing new questions about its reliability. This month has been jam-packed with AI releases: Apple announced that Siri can now enlist ChatGPT's help; and Meta revealed the latest version of its Llama AI. Relatedly, Google unveiled a major quantum computing breakthrough last week: Willow, a chip that enables the first "below threshold" quantum calculations, meaning it has far better error-correction capabilities as calculations are scaled up. 
• Is Broadcom the new Nvidia? Broadcom appears to be on track for an NVIDIA -like stock surge — but it needs to show that it can deliver on its promises, Bloomberg reports. While the California-based chipmaker is now valued at over $1 trillion, its non-AI operations have shown signs of weakness. On the other hand, it could see its profits grow so fast that its valuation drops, as happened to Nvidia. Meanwhile, Broadcom and other challengers’ rise doesn't mean the market leader is out of the game: Even as it slips into correction territory, Nvidia still has key partnerships with Google and Amazon, notes The Wall Street Journal. Speaking of Nvidia, the company has expanded its China workforce by nearly a third this year, Bloomberg reports, citing anonymous sources — part of an intensified focus on autonomous driving technologies. 
• Salesforce is doubling the number of salespeople it plans to hire to push its new AI-powered software. Speaking at a company event in San Francisco this week, CEO Marc Benioff said the business software giant aims to hire 2,000 people to sell its Agentforce AI platform, which can manage customer support and sales development autonomously. Benioff previously said Salesforce aimed to hire 1,000 people. The company, which debuted Agentforce in October, announced the software’s second generation, which Benioff said was gaining traction and will be available in February. Salesforce shares hit a record high earlier this month.
• And Apple is ramping up its in-house chip plans. The tech giant is creating a chip, called Proxima, for Bluetooth and Wi-Fi connections, Bloomberg reports, citing anonymous sources. Apple is partnering with Taiwan Semiconductor for the venture, which will replace components provided by Broadcom next year. However, Apple is expanding collaboration with Broadcom in other areas. The companies are teaming up to develop Apple's first server chip designed to scale AI features, The Information reported, citing anonymous sources. Unlike many of its peers, Apple doesn't buy AI chips from Nvidia, which dominates the market.
• Speaking of chips, two of the largest chipmakers are facing off in federal court this week. In a dispute that “threatens to roil the technology industry,” according to Bloomberg, Arm Holdings is suing Qualcomm in an effort to resolve a disagreement over the use of Arm’s chip designs. The trial centers on Qualcomm’s 2021 acquisition of chip designer Nuvia, which had a licensing agreement with Arm prior to the takeover. Arm, one of Qualcomm’s biggest customers, alleges that Qualcomm didn’t get permission to transfer and use Nuvia’s licenses after the acquisition. Qualcomm argues that its current licensing agreement with Arm is adequate.

Here’s a list of other notable AI developments from this week:

• Perplexity has acquired the startup Carbon , a retrieval engine that connects external data sources to large language models, as it looks to boost its search capabilities. See co-founder and CEO Aravind Srinivas ’s LinkedIn post for more.
• AI startup Cartesia , which is building a new AI model architecture called state space models (SSMs), which it claims can handle large amounts of data at once, has raised  $22 million in new funding, bringing its total capital raised to $27 million. See Index Ventures partner Shardul Shah ’s LinkedIn post for more details.
• AI startup Vapi , which helps businesses deploy AI-powered voice agents, has raised $20 million in Series A funding. See founder and CEO Jordan Dearsley 's LinkedIn post for more.
• Ex-OpenAI researcher Alexis Conneau has launched WaveForms AI , a startup that will work to develop software that can pick up on emotional cues and nuances in speech, with the ultimate goal of "creating AI that feels indistinguishable from talking to a human." 
• OpenAI-backed Speak , which uses AI to help people learn languages by speech and listening, has raised $78 million in Series C funding, valuing it at $1 billion. See CEO Connor Zwick ’s LinkedIn post for more.
• You can now interact with ChatGPT by calling it, with OpenAI this week debuting what it's calling an "easy, convenient and low-cost way" to try out its buzzy chatbot, as part of the company’s "12 Days of OpenAI" event.
• A former OpenAI whistleblower, who had raised concerns about the company's use of copyrighted material in training its models, was found dead from an apparent suicide.

Catch up on the tech headlines you may have missed this week and what our members are saying about them on LinkedIn.

• SCOTUS agrees to hear TikTok case. The U.S. Supreme Court has agreed to hear emergency arguments to save TikTok . The social media platform and its Chinese parent company, ByteDance , are challenging a law that requires the app to be sold or face a U.S. ban by Jan. 19. TikTok and ByteDance say the sell-or-ban mandate violates Constitutional protections on free speech, while supporters of the legislation say it upholds national security interests. A federal appeals court unanimously upheld the law earlier this month. The high court will hear arguments from TikTok, ByteDance and content creators on Jan. 10. Meanwhile, distressed creators are taking steps to migrate to other platforms if a TikTok ban does go through — and Meta and Google stand to benefit, per Bloomberg.
• Speaking of Meta , the company’s nascent Threads platform recently reached 100 million daily active users, according to a Monday post from CEO Mark Zuckerberg. The post represents the first time Meta has revealed the site's DAUs. Zuckerberg also claimed that Threads now boasts 300 million monthly active users. Both Threads and Bluesky have experienced considerable growth in recent months as some users decamp from X/Twitter, and Meta has not been shy about adopting some of Bluesky's signature features. Also this week, Meta's Instagram rolled out its first system for scheduling direct messages, whereas last week, it announced a feature called "trial reels," which allows creators to post content that is only visible to non-followers and does not show up on their profile. In related news, Meta also shared updated stats on the usage of its LLM Llama, with VP of GenAI Ahmad Al-Dahle sharing that the model has surpassed 650 million downloads.
• Meanwhile, Google is taking another run at wearable tech. The tech giant is teaming up with Samsung Electronics to offer a mixed-reality headset more than a decade after its Google Glass smartglasses flopped with consumers. Named “Project Moohan” after the Korean word for “infinite,” the device features a new version of Google’s Android software, which integrates AI capabilities and allows other companies to design headsets and glasses for the operating system. Google's latest foray into mixed reality sets up a direct challenge to Apple’s Vision Pro and Meta’s VR headsets in a market that's faced slow adoption. To combat that, Apple is also reportedly looking to partner with Sony to support PlayStation VR hand controllers, Bloomberg reports, citing anonymous sources. Apple has sold fewer than 500,000 mixed reality headsets since they hit stores in February, per Bloomberg, and struggled to attract gamers. 
• And Apple is reportedly scrapping its iPhone subscription. The project, which dates from 2022, was aimed at making iPhone ownership similar to an app, with monthly fees and yearly phones that would result in higher sales, per Bloomberg. However, after its Apple Pay Later hit regulatory scrutiny earlier this year, the company decided to pause it, reports Bloomberg's Mark Gurman, citing anonymous sources. 

Here’s keeping tabs on key executives on the move and other big pivots in the tech industry. Please send me personnel moves within emerging tech.

• Meta has named longtime executive John Hegeman as its new chief revenue officer, a role that was not directly filled after the company's former CRO David Fischer left in 2021. The company has also promoted Justin Osofsky to head of partnerships and business development. See Osofsky’s LinkedIn post for more.
• Airbnb has hired former Snap executive Juan David Borrero as its global head of partnerships and business development. See chief business officer Dave Stephenson’s LinkedIn post for more.
• Character AI has hired former Google executive Sunita Verma as its chief technology officer, she shared on LinkedIn. 
• Zendesk has hired Google’s Shashi Upadhyay as its president of product, engineering and AI. See CEO Tom Eggemeier’s LinkedIn post for more.
• Perplexity has hired Ramp’s Jenny Tsung as its head of product marketing, she shared on LinkedIn.

Pitch me the interesting investors, founders, ideas and companies powering emerging technologies like AI to reach the inboxes of nearly 1 million subscribers plus thousands more on LinkedIn. Follow me for other tech updates.