Axios Pro Rata: Copperhead road
1. Key Themes
Theme 1: Domestic Copper Processing as a Critical AI Infrastructure Play
The AI boom is creating surging demand for copper, exposing a dangerous U.S. vulnerability: the country has the raw material but not the refining capacity.
"The U.S. is copper rich and refining poor." — Victoria Beasley, Gigascale Capital
"Copper is AI. If we don't have copper, we are at major risk for all aspects of that, from power to bits and flops." — Stephen Empedocles, Clark Street Associates
"Copper wires are the building block of electrical systems for data centers, the power grid and vehicles."
The U.S. Geological Survey added copper to its critical minerals list in November, and the Trump administration has made domestic critical mineral production a priority — though "substantial funding has yet to follow."
Theme 2: Mega-Buyouts of Enterprise Software Are Accelerating
Silver Lake's potential take-private of Workday — valued at $51 billion after an 18% share jump on the Reuters report — would rank among the largest software buyouts in history, in what the article calls "a stand-out year for big-dollar M&A."
"The potential deal indicates Silver Lake believes large systems of record are less vulnerable to AI disruption, given they're ingrained in enterprises, hard to replicate, and can leverage data for AI initiatives." — Chris Metinko, Axios Pro Deals
This follows Silver Lake's ~$55B take-private of Electronic Arts (with Saudi Arabia's PIF and Affinity Partners) and Thoma Bravo's $16B acquisition of Workday rival Dayforce, signaling a clear pattern of PE firms consolidating enterprise software at scale.
Theme 3: Deeptech and Physical Infrastructure Are Gaining Favor Over Pure Software
Mining tech funding rebounded after a difficult 2024 "as deeptech gains favor amid AI-driven pressure on software." Multiple well-credentialed investors (Breakthrough Energy Ventures, Future Ventures, BHP Ventures, SOSV) are backing copper processing startups, signaling a rotation from software toward physical infrastructure bets.
"I think it's an underinvested in category, and not just from a venture standpoint, but from a total U.S. infrastructure standpoint." — Victoria Beasley, Gigascale Capital
Theme 4: Sovereign Wealth and Institutional Capital Are Co-Investing in Mega-PE Deals
The Silver Lake/Workday talks follow a now-established playbook of bringing in large non-traditional co-investors to finance transactions at a scale that no single fund can absorb alone.
Silver Lake "could bring in additional investors to finance the deal" and previously "teamed up with Saudi Arabia's Public Investment Fund and Affinity Partners for its roughly $55 billion take-private of video-game maker Electronic Arts last year."
Theme 5: Databricks Continues Its Ascent as a Foundational AI Data Layer
Databricks raised $5B at a $190B valuation from a syndicate spanning growth equity, crossover, and sovereign wealth funds — the breadth of the investor list (Coatue, Blackstone, MGX, T. Rowe Price, Sixth Street, a16z, Temasek, TPG, and many more) reflects institutional conviction in data infrastructure as the durable layer of the AI stack.
2. Contrarian Perspectives
Contrarian 1: Enterprise SOR Software Is More AI-Resistant Than the Market Believes
The prevailing bear case on legacy HR/enterprise software is that AI will disintermediate it. Silver Lake is betting the opposite.
"The potential deal indicates Silver Lake believes large systems of record are less vulnerable to AI disruption, given they're ingrained in enterprises, hard to replicate, and can leverage data for AI initiatives." — Chris Metinko, Axios Pro Deals
The evidence: Silver Lake is willing to pay a premium above $51B for Workday, and Thoma Bravo paid $16B for Dayforce (a direct Workday rival) earlier this year — both firms acting simultaneously suggest this is a considered thesis, not an outlier bet.
Contrarian 2: Reshoring Copper Processing Is More Achievable Than Other Critical Minerals
The prevailing framing around supply chain reshoring focuses on rare earths as the hard problem. The article pushes back specifically on copper.
"Bringing copper processing to the U.S. is a more solvable challenge than reshoring supply chains for minerals like rare earths, experts say."
The structural reason: the U.S. already has meaningful copper resources in the ground. The gap is refining capacity and technology, both of which startups like Red Metals, Still Bright, Jetti, and Ceibo are directly addressing with new electrochemical approaches.
Contrarian 3: Copper Processing is Underinvested Relative to Its Strategic Importance
Despite copper being on the USGS critical minerals list and being essential to AI infrastructure, VC dollars in the sector remain thin.
"I think it's an underinvested in category, and not just from a venture standpoint, but from a total U.S. infrastructure standpoint." — Victoria Beasley, Gigascale Capital
Federal support has also lagged: the Trump administration has made domestic critical minerals a priority, but "substantial funding has yet to follow."
3. Companies Identified
Workday | $51B HR software company | Subject of a potential Silver Lake take-private that would rank among the largest software buyouts in history; shares jumped 18% on the Reuters report | "The deal would rank among the largest software buyouts in history, in a stand-out year for big-dollar M&A."
Silver Lake | Major private equity firm | Pursuing Workday take-private; previously led ~$55B EA take-private with PIF and Affinity Partners | "Silver Lake could bring in additional investors to finance the deal."
Databricks | AI/data platform | Raised $5B at a $190B valuation from a massive multi-institution syndicate | Listed across Coatue, Blackstone, MGX, T. Rowe Price, Sixth Street, a16z, TPG, Temasek, and many others
Red Metals | U.S.-based copper processing startup | Outfitting a 42,000-sq-ft facility with processing, refining, and casting equipment; secured $3.5M equipment financing with CSC Leasing | Backed by Future Ventures and Tesla co-founder JB Straubel
Still Bright | Newark, NJ copper processing startup | Built pilot-scale reactors using a reusable electrochemical reagent; capacity of two tons/year; weighing $40M Series A in 1Q27 | Backed by Breakthrough Energy Ventures, SOSV, and Fortescue | "Still Bright is weighing a $40 million Series A round in 1Q27."
Gigascale Capital | VC firm focused on critical infrastructure | Backed Red Metals and Skouria; actively advocating for more copper investment | "The U.S. is copper rich and refining poor."
BHP Ventures | VC arm of mining giant BHP | Backed copper processing startups Jetti, Ceibo, and PH7 Technologies | Operator of one of the world's largest copper mines in Northern Chile
Jetti / Ceibo / PH7 Technologies | Copper processing startups | Backed by BHP Ventures as part of mining giant's bet on new processing technologies | Mentioned as part of the growing startup crop in domestic copper processing
Dayforce | HR software (Workday rival) | Acquired by Thoma Bravo for $16B; cited as context for PE interest in HR software | "Thoma Bravo agreed to a $16 billion acquisition of Workday rival Dayforce earlier this year."
Electronic Arts | Video game maker | Taken private by Silver Lake, PIF, and Affinity Partners for ~$55B | Cited as precedent for Silver Lake's consortium approach to mega-deals
Core Automation | AI continual learning model developer, founded 2026 | Seeking up to $500M in new funding despite being founded the same year | Remarkable capital raise ambition for a brand-new company
Skouria | Copper-related startup | Backed by Gigascale Capital alongside Red Metals | Briefly mentioned as part of Gigascale's copper portfolio
Lemma | SF-based agentic AI monitoring tool | Raised $2.3M pre-seed led by Matrix and YC; angel investors from OpenAI, xAI, Meta, and DoorDash | Early signal of emerging infrastructure layer for AI agent oversight
Yuno | SF-based payments infrastructure | Raised $45M Series B led by Global PayTech Ventures; joined by a16z and Tiger Global | Continued institutional appetite for payments infrastructure
Sizable Energy | Italian pumped hydro startup | Raising $25M to store and generate electricity at sea | Novel offshore energy storage approach
Core Scientific | Blockchain infrastructure (Nasdaq: CORZ) | Completed $444M acquisition of crypto miner Polaris DS from Altair Capital | Signals consolidation in blockchain/crypto infrastructure
4. People Identified
Victoria Beasley | Founding partner, Gigascale Capital | Lead voice on the copper investment thesis; her firm has backed Red Metals and Skouria | "The U.S. is copper rich and refining poor" and "I think it's an underinvested in category."
Stephen Empedocles | CEO, Clark Street Associates | Made the starkest statement linking copper to AI survival | "Copper is AI. If we don't have copper, we are at major risk for all aspects of that, from power to bits and flops."
Brandon Tinianov | Managing Director, Building Technologies, Clark Street Associates | Signaled incoming federal activity on copper | "I think we'll see some new [federal] activities with regards to that metal."
Jackson Switzer | CEO, Red Metals | Leading build-out of 42,000-sq-ft copper processing facility; secured CSC Leasing equipment financing | Quoted on facility equipment and financing details
Randy Allen | CEO, Still Bright | Leading electrochemical copper processing startup toward a potential $40M Series A in 1Q27 | "Still Bright is weighing a $40 million Series A round in 1Q27."
JB Straubel | Tesla co-founder; backer of Red Metals via Future Ventures | Notable validator lending credibility to the copper processing startup space | Mentioned as a Red Metals backer
Chris Metinko | Reporter, Axios Pro Deals | Provided the analytical bottom line on the Silver Lake/Workday deal | "The potential deal indicates Silver Lake believes large systems of record are less vulnerable to AI disruption."
Vikram Pandit | CEO, The Orogen Group | Participated in strategic investment into Chatham Financial alongside GIC and Atairos | Signal of continued senior financial executive involvement in fintech infrastructure
5. Operating Insights
Insight 1: Use Equipment Financing to Preserve Equity Capital in Hardware-Intensive Businesses
Red Metals secured a $3.5M equipment financing facility with CSC Leasing to fund its facility's first phase rather than raising dilutive equity for capital expenditures. For founders building physical infrastructure or manufacturing operations, non-dilutive equipment financing is an underused lever to stretch runway and reduce equity burn during the capital-intensive build phase.
Insight 2: Co-Investor Syndication Is the New Playbook for Mega-Deals
Silver Lake's approach — seeding a deal and then syndicating to sovereign wealth funds and other large LPs — allows execution of transactions that exceed the capacity of any single fund. For PE operators, the takeaway is that deal size is less of a constraint when you architect the syndicate first.
Silver Lake "could bring in additional investors to finance the deal" and previously "teamed up with Saudi Arabia's Public Investment Fund and Affinity Partners for its roughly $55 billion take-private."
Insight 3: Pilot-Scale Proof of Concept Before Large Fundraise
Still Bright built pilot-scale reactors first (2 tons/year capacity in Newark) and is only now considering a $40M Series A. This staged approach — demonstrate technical feasibility at small scale, then raise growth capital — is particularly important in deep tech where investor skepticism is high and proving the science is a prerequisite to accessing institutional capital.
6. Overlooked Insights
Overlooked Insight 1: Retail Sales Fell 0.6% in July — But the Auto Sector is the Soft Spot
Buried in the "Final Numbers" section: retail sales fell 0.6% in July, with auto sales dropping 1.8% "even as vehicle prices rose" — a potentially concerning sign of demand destruction in a high-ticket, credit-sensitive category, distinct from the energy price-driven decline at gas stations. For investors in automotive retail, EV manufacturers, or consumer credit, the combination of rising prices and falling unit sales warrants closer attention.
Overlooked Insight 2: Robinhood Ventures Fund II Listed on NYSE, Raising ~$200M
Robinhood launched a publicly traded venture fund — Robinhood Ventures Fund II — which began trading on the NYSE after raising roughly $200M at $25/share. This is a notable structural experiment: a retail brokerage offering its customer base exposure to VC returns through a publicly listed vehicle. It sits in the same emerging category as PWRL (the newsletter's advertiser), suggesting a broader market shift toward democratizing private market access through public market structures.