Axios Pro Rata: AI builds AI

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1. Key Themes

Theme 1: Dealmaking Is Strong in Aggregate, But Losing Momentum at the Margins

The headline numbers are impressive, but the intra-period data tells a more cautious story. Global deal volume is up 41% YoY, with U.S. deals up 80% and PE-backed deals up a stunning 264% domestically — driven largely by mega-deal consolidation. However, cracks are emerging beneath the surface.

"March year-to-date for U.S. deal volume is down 19%, while the number of U.S. deals is off 61%."

"This is the second straight spring that animal spirits have been dashed by the White House — last year was 'Liberation Day' tariffs, this year Iran."

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Theme 2: AI Building AI — The Next Frontier of Labor Displacement

The newsletter's "Big F***ing Deal" is Autoscience, a seed-stage company building automated AI research labs — i.e., AI systems that design and train other AI models. This signals a potential inflection point: not just AI replacing blue-collar or white-collar workers, but AI replacing AI engineers themselves.

"This is an AI model designed to build other AI models, suggesting that not even AI engineers will be safe from labor disruptions."

"Just like how AI systems have become very good at competitive chess and competitive programming, we are building AI systems that are very good at building other machine learning models. We expect that, just like in those fields, these systems are going to become better than humans at doing that." — Eliot Cowan, Autoscience CEO

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Theme 3: Autonomous Vehicles Are Entering Large-Scale Capital Commitment Phase

Uber's $1.25B investment in Rivian — structured as $300M upfront with milestone-based payments through 2031 — to deploy thousands of robotaxis across 25 cities by 2028 signals that the AV space is graduating from pilots to platform-scale infrastructure bets.

"Uber keeps upping the ante on its autonomous vehicle strategy, with a growing list of AV partnerships and increasing financial commitments for depot operations, EV charging and tens of thousands of robotaxis."

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Theme 4: AI Infrastructure and Security Are Attracting Serious Capital Across Multiple Layers

Multiple rounds this edition target the picks-and-shovels layer of the AI economy: agent training environments (Deeptune, $43M), AI coding security (Corridor, $25M), AI cybersecurity (RunSybil, $40M), data center energy efficiency (Claros, $30M), and AI research automation (Autoscience, $14M). Investors are clearly hedging across the full AI stack.

"Deeptune, a developer of 'training gyms' for AI agents, raised $43m in Series A funding. A16z led..."

"Claros, focused on reducing data center energy loss, raised $30m in seed funding. General Catalyst and Red Cell Partners led..."

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Theme 5: States Are Filling the Federal Antitrust Vacuum

With federal regulators stepping back, state attorneys general are increasingly becoming the de facto antitrust enforcement mechanism — a structural shift with real deal-blocking power.

"Eight states have sued to block Nexstar from buying rival broadcaster Tegna for $3.54b — a deal publicly supported by both President Trump and FCC chair Brendan Carr."

"State AGs have become America's new antitrust cops." — Axios' Sara Fischer

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2. Contrarian Perspectives

Perspective 1: AI Valuation Bubble Concerns Exist Even as Public Equities Are Already Negative

The consensus narrative assumes AI is still in an unchecked bull run. But the article notes that public equity indexes are in the red for 2026, and concerns about an AI valuation bubble are cited as one of several active headwinds dampening dealmaker confidence — not a future risk, but a present one.

"Ongoing concerns about an AI valuation bubble, even though public equity indexes are in the red for 2026."

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Perspective 2: The IPO Market Stagnation May Be a Leading Indicator of Broader Deal Slowdown

While headline M&A numbers look robust, the IPO market's near-total freeze — including Kraken pausing its $20B plans — may be the canary signaling broader deterioration before it shows up in lagging deal volume metrics.

"The IPO market, which has ground to a virtual halt, may be the canary in the coalmine for broader dealmaking."

"Kraken, a crypto exchange valued by VCs at $20b, has paused its IPO plans."

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Perspective 3: A Founder With a Fraud Conviction Is Raising $1B at a $4B Valuation

SyberJet, a jet startup led by Trevor Milton — the founder of Nikola who was convicted of fraud — is reportedly seeking to raise $1B at a $4B valuation. In an environment of heightened scrutiny, this is a notable test of how much the market has reset its founder accountability standards.

"SyberJet, a Phoenix-based jet startup led by Nikola founder Trevor Milton, is seeking to raise $1b at a $4b valuation."

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3. Companies Identified

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4. People Identified

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5. Operating Insights

Insight 1: Structure Milestone-Based Capital Commitments to Preserve Optionality in Uncertain Markets

Uber's Rivian deal is instructive: only $300M is committed upfront, with the remaining ~$950M tied to milestones through 2031. In a high-uncertainty macro environment (Iran conflict, rate uncertainty, credit concerns), this structure allows large strategic bets while managing downside. Operators and investors should consider milestone-gated tranches as the default deal architecture rather than the exception.

"The deal includes $300 million upfront, pending regulatory approval, with the rest based on milestones through 2031."

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Insight 2: Build Peer-Reviewed Research Credibility Early — Even at Seed Stage

Autoscience, with a tiny team and only $14M raised, has already produced a peer-reviewed paper with limited human involvement. In deep tech and AI, third-party scientific validation is a powerful credibility signal that can punch above a company's funding weight and unlock institutional partnerships and future capital.

"Autoscience is still very young with a tiny team, but already claims to have produced a peer-reviewed research paper with limited human involvement."

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6. Overlooked Insights

Insight 1: Middle East Capital Flows Are Being Disrupted by the Iran War

The Iran conflict is noted as more than a geopolitical event — it's actively cooling off Middle Eastern sovereign and institutional money flows into global deals. Given the enormous role Gulf capital has played in late-stage tech and PE over the past decade, this is an underappreciated liquidity risk for large fundraises.

"Pick your poison: The Iran war, which is heating up inflation and cooling off Middle East money flows."

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Insight 2: Constellation Energy's Calpine Acquisition Is Forcing a $5B Asset Sale

LS Power is acquiring a natural gas portfolio from Constellation Energy for $5B — not as a strategic choice, but because Constellation is required to divest due to regulatory commitments tied to its Calpine acquisition. This is a textbook example of how mega-deal consolidation creates forced-seller opportunities for well-positioned buyers.

"LS Power agreed to buy a portfolio of natural gas-fired generation in Pennsylvania and Delaware for $5b from Constellation Energy, which is divesting due to regulatory commitments tied to its Calpine acquisition."