Harry, Rory and Jason are back!
We’re witnessing an unprecedented capital concentration in AI with NVIDIA’s $100B OpenAI investment creating a fascinating circular money machine, while new H-1B visa fees threaten startup talent acquisition and the venture funding landscape shifts dramatically toward mega-rounds for a tiny number of companies. The era of “founder friendly” has become somewhat hollow rhetoric, and traditional B2B growth metrics like “triple triple double double” are becoming irrelevant as the market polarizes between AI unicorns and fundamentals-driven businesses.
Key Numbers That Matter:
- 75% of 2025 VC dollars went to just 19 companies
- NVIDIA’s $4.5T market cap relies on only 6 customers for 83% of revenue
- New H-1B visa fees of $100K will impact 440,000 annual applications
- Navan filing for IPO at $8B valuation with $613M revenue, 32% growth
The $100B AI Money Machine: When Six Customers Drive a $4.5T Market Cap
NVIDIA’s massive investment in OpenAI represents more than just capital deployment—it’s the creation of what could be an infinite money printing loop. OpenAI commits $300B to Oracle, Oracle buys NVIDIA chips, and NVIDIA invests back into OpenAI. As one observer noted: “Sam’s gonna get to make the bet he wants to make which is apply infinite amount of capital and see how long these scaling laws last.”
The most striking aspect? NVIDIA, now the world’s largest company by market cap at $4.5 trillion, has only six meaningful customers accounting for 83% of revenue. Compare this to Apple’s 2 billion customers or Microsoft’s hundreds of thousands of enterprise clients. It’s “this really weird dynamic where you’ve got this company with only six customers, but the good news is all six of them are determined to spend themselves into oblivion to win the prize.”
The Scaling Laws Gamble
Sam Altman’s recent comments suggest this is just the beginning: “We need three orders of magnitude more compute than this.” The market is essentially allowing OpenAI to test whether massive capital can break through current AI limitations. Whether the marginal $300 billion will earn a return on capital remains questionable, but as Rory put it: “We will find out because no one’s going to call timeout along the way.”
The H-1B Shock: $100K Fee Creates New Startup Reality
The new $100,000 fee for H-1B visas represents a significant shift for the startup ecosystem. With 440,000 applications generating $19-120 billion in GDP annually, this policy change will have material impact on early-stage companies.
“Anyone that has been doing this for a while that isn’t just three kids working 24/7 in SF has had H-1B folks on their team,” noted one investor. “My first startup wouldn’t have been possible without H-1B—at least on its surface—I had two on my first team of 10.” notes Jason.
While larger tech companies will simply absorb the cost, startups face a more complex reality. The workaround? Most founders are now pursuing O-1 visas, though these come with their own complications and ongoing maintenance requirements.
Venture Capital’s Great Concentration: 75% of Dollars to 19 Companies
The venture landscape has fundamentally shifted. In 2025, 75% of VC dollars went to just 19 companies—a stunning concentration that reflects the bifurcation between traditional venture and ultra-late-stage private public investing.
“What’s really happened is on top of that business has emerged this totally separate business called ultra late stage,” explains Harry. “It just means there’s another business that you can choose to be in or not that exists one or two orders of magnitude above you in the valuation world.”
The Death of “Triple Triple Double Double”
Traditional SaaS growth metrics are becoming obsolete for many companies. While “triple triple double double” (3x-3x-2x-2x growth pattern) remains relevant at early stages, it’s insufficient for late-stage rounds in today’s market.
“There’s only so many folks growing beyond triple triple double double at 50 to 100 million—VCs will take the meeting,” notes Jason. But for companies in traditionally unloved verticals or without AI narratives, even strong growth isn’t guaranteeing funding notes Harry.
The Founder Friendly Facade
The concept of “founder friendly” has become meaningless in today’s hyper-competitive environment. “Founder friendly has become bullshit,” argue both Harry and Jason. “Any hot AI deal, there is no diligence provided, nor is any done. It’s just done on Saturday.”
Real founder-friendly behavior shows up in difficult times: “Founder friendly is writing the check when no one else does. That’s founder friendly. Founder friendly is when no one else is there at the board meeting anymore and you’re there and you still have a W on the other side of it.”
Market Concentration Creates New Dynamics
The concentration extends beyond just funding to data labeling and infrastructure. Multiple data labeling companies report that the same two AI giants make up 55% of their revenue across all providers. This concentration creates a unique dynamic where “none of those six customers is trying to optimize their cost basis. They’re just trying to build as fast as they can.”
IPO Strategy in a Concentrated World
Companies like Navan (filing at $8B with $613M revenue, 32% growth) are timing their IPOs strategically. Rather than waiting for profitability, they’re moving quickly to avoid being the “third player” in their category after competitors like Brex and Ramp potentially go public.
“When people perceive it as a direct comp, even if it isn’t, it becomes troubling to get out because every public investor says, ‘I already have Brex and Ramp. Why would I buy you?'” notes Rory.
The New Venture Reality Check
For investors, the current environment requires recalibrating expectations. Jason admits: “I’m 0% cash, just like 2008. I remember feeling I could literally not have enough cash to fix the roof on my house—nothing was more fun than selling my stock at a 70% loss to fix that roof.”
The frothiness is evident: LPs are now bragging about returns on LinkedIn, historically a sign of market peaks. Yet for companies with genuine traction, funding remains available. The key is having clarity on realistic next-round pricing rather than extrapolating long-term returns.
Portfolio Concentration Lessons
Success breeds more risk tolerance. “Having an early success is highly correlated with future success. Partly you get the referral effect, but partly I think it’s that you just have the stomach to roll the dice and you get braver.” notes Rory.
This explains why firms like Sequoia can hold positions like Klarna while emerging managers face different portfolio pressures around concentration limits.
Looking Ahead: The End of 2021 Valuations
There’s growing consensus that 2021 valuations should be written off entirely. “I think we can’t talk about 2021 valuations anymore. It’s time to just flush them down the toilet,” suggests Jason proposing a deadline: “You’ve got 90 days left to caveat and complain about your 2021 valuations. And on January 1, 2026, no one is allowed to talk about their 2021 valuations.”
Companies like Notion, now at $500M ARR with re–\acceleration, show that B2B companies can recover by embracing AI while maintaining their core business. The path forward isn’t becoming “something totally different” but rather intelligent integration of AI capabilities.
The Monopoly Question
OpenAI’s consumer dominance raises antitrust questions, but it’s complicated by their massive subsidization of users. “Never have there been a less successful monopoly than ChatGPT because they’re subsidizing the consumer surplus delivered by ChatGPT in the tens of billions of dollars” notes Rory.
The real monopoly question may be more relevant to NVIDIA, which has true market share dominance in AI chips, making their equity investment in OpenAI particularly strategic.
Key Takeaways
- Capital concentration is unprecedented: 75% of 2025 VC dollars went to just 19 companies, creating a new tier of ultra-late-stage private investing distinct from traditional venture
- H-1B changes will impact startups materially: The $100K fee creates real barriers for early-stage companies, though workarounds and for founders use of O-1 visas are and will emerge
- “Founder friendly” has become meaningless: In hot AI deals, there’s no diligence and term sheets are signed on Saturdays, making the concept hollow
- Traditional SaaS metrics are obsolete: “Triple triple double double” no longer guarantees late-stage funding except for the hottest AI companies
- Timing matters for IPOs: Companies are racing to go public before competitors in their category, as being third creates comparison problems
- 2021 valuations need to be forgotten: It’s time to write down frothy valuations and move forward with fundamental-based pricing
Quotable Moments
“This is an epic monopoly like we’ve never seen. Think how much ChatGPT already dominates our lives. It’s the Standard Oil of tech.” — Jason discussing OpenAI’s market dominance
“You’ve got this company with $4.5 trillion market cap with only six customers. That’s bad news. But the good news is all six of them are determined to spend themselves into oblivion to win the prize.” — Rory discussing NVIDIA’s customer concentration risk
“Any hot AI deal, there is almost no diligence provided, nor is any done. It’s just done on Saturday. All you can lose is one extra money.” — Jason Lemkin on current venture funding practices
“Having an early success is highly correlated with future success. Partly you get the referral effect, but partly I think it’s that you just have the stomach to roll the dice and you get braver.” — Rory on venture capital success patterns
“I’m 0% cash, just like 2008. Nothing was more fun than selling my stock at a 70% loss to fix the roof on my house.” — Jason reflecting on his current market position
“I’m seeing less diligence now than I did in 2021.” — Harry discussing the current state of venture due diligence
“The hardest thing I find is honestly we are getting it wrong. A lot of our startups at 20VC Fund now are are growing nicely and I cannot predict what the next round wants because it seems to be moving so much and I’m having real problem predicting financing markets.” — Harry on the unpredictability of current funding markets
