Private Markets Update & Deal Flow

China is increasingly replicating the financial engine behind Silicon Valley, using capital markets — especially in Hong Kong — to fuel its tech ecosystem. Investors on the ground see a clear shift: Beijing recognises how VC and IPOs powered US innovation and is now building a similar model domestically.

Hong Kong has become the central hub of this strategy. After a strong rebound, it is now the world's leading venue for IPO fundraising, with more than 400 Chinese companies reportedly preparing to list. Market participants describe the current surge as the largest in decades.

Geopolitics is also playing a role. Increased US scrutiny is pushing more companies to list closer to home, while investors are increasingly backing ambitious technologies like AI, semiconductors and aerospace.

The signal: China is not just catching up — it is building a parallel system. More policy-driven and subject to regulatory unpredictability, but the direction of travel is unmistakably clear.

The legal battle between Musk and OpenAI has escalated, revealing deep personal tensions at the highest level of the AI industry. Musk reportedly threatened to make Altman and Brockman "the most hated men in America" after they rejected settlement talks shortly before the trial.

Internal messages presented in court suggest Musk himself previously proposed a structure that would have given him majority control. OpenAI's defence argues the lawsuit is intended to slow down a rival rather than address genuine governance concerns.

The outcome could disrupt OpenAI's IPO plans and reshape its USD 13B partnership with Microsoft.

Worth watching: A ruling in Musk's favour could disrupt OpenAI's IPO timeline and reshape its USD 13B partnership with Microsoft — while influencing how future AI companies balance mission-driven origins with commercial scale.

Sam Altman considered spinning off OpenAI's robotics and consumer hardware divisions to let them raise external funding. The plan was rejected, partly due to accounting constraints.

As part of a strategic refocus, OpenAI is prioritising the development of a "superapp" aimed at developers and enterprise clients. Its hardware division — boosted by the USD 6.5B acquisition of Jony Ive's startup — aims to develop a new AI-powered personal device by 2027.

Founders Fund has raised a record USD 6B growth fund, the largest in its history. About USD 4.5B came from external investors including sovereign wealth funds, while USD 1.5B was contributed internally by partners and employees including Peter Thiel.

Major investments from the prior fund included Anthropic (reportedly USD 1.25B invested), Anduril Industries, Stripe, Ramp, Cognition AI, and OpenAI. The new fund will continue this concentrated approach, backing roughly a dozen startups over two to three years.

The trend: Venture capital is converging on a mega-fund, hyper-concentrated model. The most valuable private companies are being locked up by a handful of firms before they ever hit public markets.

Clear Street is partnering with Kalshi to give institutional clients access to prediction markets. Platforms like Kalshi and Polymarket reportedly processed over USD 23B in trading volume last month. In April, Kalshi overtook Polymarket to claim the top spot.

For Clear Street, the move comes after it withdrew a planned IPO earlier this year. Supporters argue event contracts can serve as hedging tools for businesses exposed to risks such as weather events, elections, or geopolitical disruptions.

Why it matters: Kalshi is no longer a crypto-adjacent curiosity. With USD 23B+ in monthly volume and Clear Street connecting it to institutional order flow, prediction markets are becoming a legitimate alternative asset class.

DeepSeek is reportedly seeking to raise between USD 3B and USD 4B in what would become the company's first-ever external funding round, at a valuation of up to USD 50B. China's state-backed National AI Industry Investment Fund is expected to lead, with Tencent in discussions.

The move comes as competition in China's AI sector intensifies, with rivals including ByteDance and Alibaba accelerating investments into infrastructure focused on autonomous AI "agents".

The shift: DeepSeek breaking its self-funded model signals that the AI agent race requires capital at a scale no individual hedge fund can sustain alone. State backing plus Tencent's distribution would make it a formidable platform player.

Anthropic has launched a new enterprise AI joint venture alongside Blackstone, Hellman & Friedman, and Goldman Sachs, reportedly valued at USD 1.5B. Additional backers include Apollo, General Atlantic, GIC, Leonard Green & Partners, and Sequoia Capital.

At nearly the same time, OpenAI was reported to be launching "The Development Company," targeting USD 4B from 19 investors at a USD 10B valuation. Both ventures deploy forward-deployed engineers — similar to Palantir's approach — working directly with clients to customise AI tools for specific workflows.

The big picture: Both Anthropic and OpenAI are approaching USD 900B valuations while building institutional revenue engines ahead of IPO. The JV model gives alt asset managers a privileged front-row seat — and a direct stake in the AI transformation of their own portfolio companies.