中东战争与利率上升威胁 AI 基建融资，Meta Muse 冲击 Instinct

The Week in Short

Ongoing conflicts in the Middle East and falling oil exports threaten the capital flows propping up the AI build-out, but it hasn’t slowed much yet. Meta’s personal AI assistant Muse gives Instinct a run for its money. Former SEC regulator Renée Jones says the rules for Silicon Valley need to change on the podcast. A new report from Menlo Ventures details how consumers are using AI tools to make money, but finds that they’re sticking with incumbent chatbots for now. Crusoe raises nearly $4 billion in a single round at a $30.9 billion post-money valuation. A major crypto regulation bill fails to pass the Senate. European fintech Revolut falls victim to cybercrime. Mark Zuckerberg gets the Colossus treatment. Bain Capital Ventures unveils a new $1.6 billion fund.

The Main Item

As Oil Revenues Slide, Middle Eastern Wealth Funds Stick With AI — for Now

Startup investors typically tell founders to ignore macro issues over which they have no control, and current trends suggest that they’re heeding that advice: the wars in Europe and the Middle East, the AI safety panic, rising interest rates, and the general breakdown of the US-led world order have barely dented the frenzied AI trade. Public and private market valuations remain near all-time highs.

Yet the threat of geopolitical shocks is growing by the day — and is destined to crimp the AI build-out in various ways.

A harsh reminder of the risks from the war in the Middle East came with AWS’s acknowledgement this week that some customer data had been lost permanently due to drone attacks on its facilities in Bahrain and the UAE at the outset of the war, and they remain mostly offline.

Officially, data center development in the Middle East is continuing apace. But when the discussion turns to hardening data centers with armaments to ward off attack, it’s clear that they’ll be getting more expensive at a minimum.

Sitting behind that is the question of whether Middle Eastern governments can continue to fund the AI buildout at the current pace with their oil exports down by half or more. Thus far, the impact on liquidity of Middle Eastern sovereign wealth funds has been limited: only Qatar has pulled back, while the UAE and Saudi Arabia are charging ahead.

Just this month, Saudi Arabia pledged $15 billion in domestic AI investment. It continues to pump money into national champion Humain while cutting back non-tech investments such as its futuristic NeoCity and the LIV golf tour. Major VC investors such as the UAE’s MGX, which has a large position in Anthropic and is also in OpenAI and xAI, continue to play aggressively. That’s possible partly because rising oil prices have partially offset declining volumes.

Indeed, the Saudis are boasting that their tech-forward efforts are helping them repair facilities quickly and weather the storm.

Yet as the war drags on, it’s far from clear that that can continue. Jack Selby, the head of Peter Thiel’s family office, warned in the spring about the tech’s over-reliance on Middle Eastern money, which he said accounted for 25% of all the capital being invested in AI globally. That’s at the high end of such estimates, but major VC firms have long counted on flush Middle Eastern LPs and any softening in their finances is sure to hit Silicon Valley hard.

War risks aside, rising interest rates will raise the cost of the debt that’s financing the data center build-out, as Martin Peers smartly points out in The Information. Apollo’s chief economist is warning that hyperscaler debt is getting riskier, which will also make it more expensive.

On top of all that, the political firestorm around AI safety shows no signs of abating — or growing more constructive — anytime soon. In Washington, President Trump makes one nonsensical comment after another while his aides quietly freak out. Everyone is talking their book, making it hard to sort signal from noise.

Capital famously hates uncertainty — and rarely has more uncertainty weighed on the global economy.

Personal Agent Battle

Meta’s Muse Eats into Instinct’s Early Lead

The personal AI agent war is upon us. For weeks now, tech insiders have been drooling over Instinct, a months-old startup that works as a chat box on WhatsApp or iMessage and books tickets, finds apartments, sends emails, and cancels subscriptions, all for free so far.

But even as Benchmark-backed Instinct reportedly seeks a $10 billion valuation, Meta is nipping at its heels.

Meta’s Muse, launched last week, connects to each app on your phone and can run the mundane parts of life with its own browser. The browser is visible on your screen, while Instinct runs everything on its backend, with only a chat box visible to you.

Instinct has the happy problem — but problem nevertheless — of slowing answers due to capacity constraints, as we’ve experienced along with many others. Meta is aiming to capitalize.

Vijay Rayapati, who runs Atomicwork, an AI rival to ServiceNow, said Muse feels faster and he is using it much more than Instinct, a sentiment echoed by many on X. Muse also works on “isolated compute,” Rayapati said, making it faster and more reliable for privacy purposes, compared to Instinct which distributes compute across users.

Both companies also have to compete with Town, backed by Andreessen Horowitz and Forerunner Ventures.

It is obviously far too early to call any winners, but Meta’s entry, and early success, shows the power that Big Tech incumbents still enjoy.

Instinct’s 23-year-old CEO Noah Shinn, who seems to communicate with the world mainly via X, is rolling out new features at breakneck speed, though he doesn’t acknowledge the competition. In recent days, Instinct can now make phone calls, and talk to your friends’ Instinct agents to coordinate plans, taking it deeper into people’s lives.

Newcomer Podcast

Former SEC Official Renée Jones on FTX, Crypto & Silicon Valley’s Fraud Problem

Two Big Charts

Consumers Are Using AI to Generate Income & Prefer Incumbent Chatbots

Almost half of frequent AI users have used it to make money in some fashion, new data shows.

According to Menlo Ventures’ latest annual State of Consumer AI Report, a survey of over 5,000 US adults revealed that 48% of those who consider themselves AI users have earned money from the technology.