But with Tuesday���s election results, the investment divide between blue, purple and red states has grown even more pronounced.

So far this year, less than 2% of all startup investment has gone to companies in post-election red states, defined as those that will have both a Republican governor and two Republican U.S. senators.

The red states��� share is much smaller than in years past due to five states shifting to purple. Of those, the largest venture hub is Texas, which shifted to purple with the election of Democratic Senator James Talarico and Governor Gina Hinojosa, followed by Ohio.

This year, as of Election Day, startups in the remaining 17 red states 1, which are home to nearly a quarter of Americans, had collectively in venture funding, with Florida, Tennessee and Utah among the largest contributors. To put that in perspective: It���s less than the typical nationwide total in a single week.

Purple states rising

The 10 purple U.S. states2, meanwhile, are home to just over a quarter of Americans and pulled in about $28.6 billion this year as of Election Day. That���s much higher than the red state tally, but still less than 6% of all U.S. startup funding.

Beyond the aforementioned newcomers Texas and Ohio, several other purple states regularly pull in sizable venture funding, including Pennsylvania, North Carolina and to some extent Wisconsin.

Also worth noting: The divide between red, purple and blue states is somewhat less stark when it comes to round counts. About 12% of startup financings of $1 million or more went to purple state companies this year, and about 9% went to red states.

Broadly, it looks like backers are still finding plenty of investment-worthy talent outside of blue states when it comes to smaller deals. However, they are concentrating most of their capital into big AI rounds for California and New York companies.

Blue states get over 90% of startup funding

This brings us to our next point: Blue states receive the overwhelming majority of startup funding, of which most goes to California.3

Per a 做厙勛圖 analysis last week, California companies had pulled in more than three-fourths of all U.S. startup funding in 2026. Most of that stems from mega-financings for San Francisco-based and.

While no other state comes close to California for attracting investment, the nearest runners up are also predominantly blue states, including New York and Massachusetts. In total, blue states have pulled in a staggering $481 billion in startup investment this year as of Election Day, per 做厙勛圖 data, a new record.

Politics and what makes for a venture hub

So is it politics, or coincidence?

Broadly speaking, the qualities that geographic startup hubs share ��� such as a deep tech talent pool, urban environs, leading tech companies and top research universities ��� aren���t specifically the domain of blue states. That said, predominantly rural states, which tend to lean red, are less likely to have those ingredients.

Even so, there���s no rule against red state startup prowess. Austin, for example, managed to cement its status as a major tech hub even while Texas remained solidly under Republican control. And Utah also boasts a sophisticated startup scene.

But following a Democratic electoral sweep, it���s hardly a surprise that more startup hubs now find themselves located in blue or purple states.

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This tracker includes layoffs conducted by U.S.-based companies or those with a strong U.S. presence and is updated at least bi-weekly. We���ve included both startups and publicly traded, tech-heavy companies. We���ve also included companies based elsewhere that have a sizable team in the United States, such as , even when it���s unclear how much of the U.S. workforce has been affected by layoffs.

Layoff and workforce figures are best estimates based on reporting. We source the layoffs from media reports, our own reporting, social media posts and , a crowdsourced database of tech layoffs.

We recently updated our layoffs tracker to reflect the most recent round of layoffs each company has conducted. This allows us to quickly and more accurately track layoff trends, which is why you might notice some changes in our most recent numbers.

If an employee headcount cannot be confirmed to our standards, we note it as ���unclear.���

Clocking in at 335 pages, the document wasn���t exactly light reading. However, after a preliminary once-over, we highlight a few of the more intriguing disclosures below:

Revenue growth is unusually rapid

For the first half of this year, Anthropic reported revenue of $16.3 billion. That���s up 14x from the same period in 2025.

Things aren���t slowing either. While the S-1 doesn���t forecast the second half of this year, has that Anthropic could reach a $110 billion annualized revenue run rate by year-end, citing analysts who met with company executives.

But losses persist

Anthropic also posted a $693 million operating income loss for the first half of 2026, down about two-thirds from last year. Its net loss for this year���s first half was $80 billion, of which about 90% stemmed from what it called a ���change in fair value of convertible notes, derivative liabilities, and 莽.���

Founders hold similar stakes

Each of Anthropic���s seven founders holds between 230,000 and 246,000 shares of Class A stock, per the S-1. This kind of egalitarianism seems unusual given that startup prospectuses usually show a founding CEO with a much larger relative stake compared to co-founders.

The company���s co-founders include , , , , , and .

Anthropic���s risk factors take up 93 pages of its IPO filing

So, is investing in Anthropic a risky bet?

Anthropic certainly seems to think so. The company���s IPO prospectus contains a staggering 93 pages of risk factors. They start at page 27 and end on page 120.

Some are pretty mundane. For instance, the company is concerned that slower revenue growth could potentially constrain its ability to fund frontier AI development and attract and retain top talent. Having incurred significant debt to date, it���s worried about the ability to keep servicing those obligations while still covering operating costs.

But more unusual risks, like rogue AI agents, are in there too. In one section, Antrophic notes that ���future models are expected to demonstrate capabilities that could provide meaningful assistance to malicious actors seeking to develop chemical, biological, or other dangerous weapon莽.���

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Acquisitions are reshaping the technology industry. Venture-backed AI companies acquired 195 AI startups this year through late September, already exceeding the total for all of 2025, 做厙勛圖 data shows.

For investors and founders, such acquisitions can represent major financial milestones. For employees holding equity compensation, a transaction can also change personal financial plans they had expected to follow for years.

A client whose employer was acquired in an all-cash transaction described to me the atmosphere inside the company during the weeks that followed: Employees repeatedly discussed the deal in office corridors, trying to understand what it meant for their equity awards, their jobs and their future. She compared the confusion to the atmosphere surrounding a major reorganization or a round of layoffs.

The transaction offered the prospect of substantial financial gains. Yet employees were struggling to establish what those gains would mean for them individually.

One acquisition, different outcomes

Employees at the same company can emerge from an acquisition with remarkably different financial outcomes.

Some own vested shares. Others hold restricted stock units, stock options or performance-based awards. Their rights depend on grant agreements, vesting conditions and transaction terms. Even two employees holding RSUs may face different payment schedules or employment requirements.

Depending on the agreements, outstanding awards may be settled in cash, accelerated, converted into replacement awards, or remain subject to future conditions. One employee might receive a substantial payment when the transaction closes. Another may have much of the expected value tied to continued employment.

The announced acquisition price provides a reference point. It rarely tells an individual employee everything they need to know about the money they will receive.

This helps explain the conversations my client described. Colleagues may compare the value of their equity without realizing that their contractual rights differ.

Wealth and employment uncertainty

Technology employees with substantial equity compensation often depend on their employer in several ways.

Their salaries, bonuses, career opportunities and investment portfolios may all be linked to the same company.

An all-cash acquisition can reduce their exposure to its share price once vested shares are converted into cash. Other forms of dependence may continue.

The acquiring company may reorganize teams, change responsibilities or introduce retention arrangements. Employees whose unvested awards remain conditional on employment may face difficult choices about staying.

Someone expecting a large payment can therefore feel financially stronger while becoming less certain about their career.

Before making plans

A major acquisition announcement can change personal ambitions long before the proceeds arrive.

Employees may begin considering early retirement, a new business, a career break or a major family purchase.

Those possibilities are worth exploring. But an announced acquisition may still require regulatory approvals and other closing conditions. The headline value of an equity award may differ substantially from the cash ultimately available to its holder.

Taxes, exercise costs where applicable, outstanding liabilities and payment schedules can all affect the outcome. So can the employee’s financial position outside the company.

A substantial payment might make a career change affordable without providing enough capital to fund permanent retirement. Existing pension savings, household spending and future earning capacity remain important.

In my work with technology executives, I have seen expectations about new wealth reshape personal plans before the underlying numbers have been established.

Employees facing a cash acquisition can begin with three questions: What rights do my specific awards provide? When will the proceeds actually become available? And what choices will the resulting after-tax capital support?

The answers may differ considerably among colleagues.

An exit without an exit decision

Founders who sell their companies often participate directly in negotiating the transaction. Employees holding equity compensation generally have much less influence over its timing.

They may have intended to retain their shares for years, sell gradually or remain employed until additional awards vested. A corporate acquisition can replace those plans with a timetable established by the transaction.

For some employees, the result will be substantial financial flexibility. For others, a significant part of their expected compensation may remain connected to future employment.

The period between announcement and closing can be especially difficult because the financial opportunity is visible while important details remain unresolved.

My client’s description of the office corridors captured that experience. The company had made a decision about its future. Its employees were left to work out what that decision meant for theirs.

The acquisition determines the terms of a corporate transaction. Each employee still has to establish how much financial freedom it creates.

is co-CEO and managing partner of , which works with technology executives, founders and families on integrated wealth planning, equity compensation and major liquidity events. His background includes more than two decades in the technology industry.

Disclosure: The views expressed are the author’s own. This article is for general informational purposes and does not constitute financial, investment, legal or tax advice. Details of the client experience have been presented without identifying information.

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Today���s venture capital ecosystem looks markedly different from even just five years ago.

Most significantly, a small number of AI companies are now attracting the vast majority of available venture capital. In Q1 2026, just four companies collectively raised $188 billion, which alone accounted for 65% of total global venture investment, per 做厙勛圖 data.

Meanwhile, in that same quarter, just 20% of global VC funding went to non-AI firms. meaning that checks are being made out to fewer companies all around.

So what happens to startups when the VC route is all but closed?

I built a company into a multibillion-dollar business without any venture funding. Here���s a few lessons I picked up along the way:

Prioritize customers and revenue, not fundraising

Many founders unknowingly treat fundraising as a measure of success. But while it���s useful, funding doesn���t result in success on its own.

Achieving strong levels of customer trust is also helpful when it comes to inspiring investor confidence. High retention rates, repeat purchases and sustained engagement drive the�� financial fundamentals on which strong valuations are built. In B2B SaaS, for instance, companies with net revenue retention above 110% . Additionally, customers provide a feedback loop that helps create the discipline every company needs, and each user is a vote of confidence that compounds over time.

Going to market: Take time on pricing strategy

Too many early-stage companies set prices too low because they fear that higher prices will repel customers. In my experience, however, underpricing more often signals uncertainty rather than good value. Customers want quality products and services, and they expect that the quality will be reflected in the price.

Incredibly, , and firms more commonly regret underpricing than overpricing. So at the outset, it’s important for startups to inform themselves what price their product or service can actually sustain, and then raise quality if it���s too low.

Equally, in services markets where prices are more established around a norm, superior quality can be an important differentiator. At the same time, however, companies must continually resist the temptation to chase customers with ever-cheaper prices, which can start a race to the bottom.

Hire the best talent

Too many founders hire for speed rather than quality. Take the time needed to raise the bar with talent. Hire the right people, and they���ll help maximize every last drop of value.

Many years ago, I decided to focus on just a small fraction of our applicants and . When we found the best developers, it meant we could compete on delivery quality rather than just price. Keeping costs low is important, but skimping on talent is not a winning strategy.

Use process automation efficiencies to drive growth

One of our best decisions was to at an early stage. Not only do these systems screen developer applications, but they can also build, match and deploy top-quality teams for each client project.

This advance allowed us to cut costs associated with evaluating applications, accelerate lead times, and improve the quality of our teamwork. In parallel, so that growth wouldn’t require proportional increases in overhead.

Whether it���s in recruitment, sales or operations, process automation can create some of the biggest drivers of growth and help bring about conditions needed for significant expansion to occur.

Operate as if cash is running out tomorrow

Companies thrive in challenging funding environments by operating with discipline. That means obsessing over unit economics, prioritizing activities that directly drive revenue, questioning every cost, and eliminating anything that isn’t pulling its weight.

Not only does this aid growth, but it also makes a business more resilient in hard times. Financial constraints drive leaders to create efficiencies by automating workflows, streamlining processes and inventing innovative work models.

Years before COVID-19 forced others to follow our lead, our company streamlined its operations and boosted scalability by developing a remote-working model. When the pandemic made remote work necessary, the fact that we already had the systems and workflows in place gave us a competitive advantage over other firms, and this in turn led to significant growth.

Long term: Stay married to the problem, not the solution

The past decade convinced many founders that venture capital was the default path to building a meaningful company. But while funding cycles rise and fall, the fundamental principles of good business don’t. Infusions of capital can accelerate growth, but they cannot create a great company from scratch.

On the longest timescale, the most successful founders are the ones committed to solving problems rather than just selling a product and chasing funding. In a world short on funding, growth simply can���t happen without it.

is the founding GP of , and chairman of , one of the largest bootstrapped nearshoring companies worldwide. Driven by his entrepreneurial spirit, he launched BDev Ventures in 2021 to help B2B companies accelerate their growth through a proprietary lead-generation platform. He also invests in and serves on the boards of biotechnology and e-learning companies. In recognition of his career path, he won distinctions such as an EY Entrepreneur Of The Year 2024 Bay Area Award.

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Congratulations to the enterprise AI company that just raised another nine-figure round to solve a problem software is supposed to solve by itself: getting humans to use the product.

You know the one. Won���t name it. Don���t have to. You���ve read the press release ��� “autonomous,” “agentic,” “category-defining” in paragraph one, and then, a few paragraphs down, where the money is actually going: hiring an army of engineers to sit inside customer offices and manually make the “autonomous” thing behave.

Nothing says ���we���ve built the future of work��� quite like raising half a billion dollars to hire more people to do the work.

The business model, decoded

Here���s how it works, in case the deck was too artfully vague:

1. Sell the customer an “AI platform.”
2. Discover the platform doesn���t actually do the thing on its own.
3. Send in the forward deployed engineers: sharp young people with CS degrees who now spend six months hand-building the workflow the website implied already existed.
4. Bill the customer for “software.”
5. Book it as ARR.
6. Raise a bigger round because ���ARR go up.���
7. Repeat, forever, with an increasingly large and increasingly expensive engineering org standing between the product and the promise it made.

This is not a flywheel. This is a payroll with a pitch deck.

And the industry has stopped even pretending otherwise ��� it���s fundraising on it, loudly.

pledged valued at $10 billion, with another $4 billion from ,, , and . The vehicle, DeployCo, has been with more than $4 billion in investment.

Meanwhile, job postings for “forward deployed engineer” are up somewhere between 800% and 1,000% year over year. Lightcast data reported by from January to August 2026. data carried by put listings up more than 800% from January to September 2025, and data from 643 in April 2025 to 5,330 in April 2026. Total comp is pushing past $300,000 in the U.S. list at $280,000 to $320,000 base pay and OpenAI at $185,000 to $300,000 base, plus equity. Fortune reported some Anthropic roles reaching $400,000 in total compensation.

Somewhere, a VC is calling this ���operating leverage��� with a completely straight face.

It is not operating leverage. It���s a staffing agency that learned to say ���agentic.���

The tell

Ask the one question the pitch deck conveniently never answers: ���If you pulled the embedded engineer out tomorrow, does the customer still get what they paid for?���

If the honest answer is ���well, no, but the ARR is real��� ��� that���s not product-market fit. That���s people-market fit, and people-market fit has a brutally unglamorous ceiling: You can only hire humans so fast, and you can never hire them cheap enough to earn a software multiple. Every new logo doesn���t get more profitable to serve. It gets another headcount request.

Two companies, same $20 million ARR. One needs 10 engineers to keep the lights on. The other needs 100. Both slides say, ���AI software company.��� The difference shows up in gross margin, cost to onboard the next customer, and whether that cost falls as the company scales.

The bill always comes due

Here���s the thing about people-market fit: it feels great right up until someone asks the unfashionable questions: What does it actually cost, fully loaded, to onboard the next customer? Does that number go down as the company scales, or does it just grow the org chart? What happens to gross margin if the first year growth slows and the headcount can���t hide behind hypergrowth anymore?

Companies funding their FDE armies with fresh nine-figure rounds are betting nobody asks these questions until after the round closes and the confetti is swept up. That���s a fine bet in a hype cycle. It���s a terrible one in a market that���s about to start reading the fine print.

Because eventually, someone always reads the fine print. A CFO builds a cost-per-deployment model. A CIO benchmarks time-to-value against three vendors instead of trusting one demo. An investor finally does the unglamorous work of separating software ARR from human-powered ARR on the same balance sheet.

The distinction buyers and investors can test is on the numbers. Software ARR should get cheaper to deliver as it scales. Human-powered ARR does not. OpenAI guaranteed the private-equity backers of its deployment vehicle an annual 17.5% return over five years, which is a different structure from a growth thesis.繒

So no, your AI isn���t autonomous. But your business model might be ��� autonomously transferring the cost of a services company onto a software valuation, for as long as the music plays.

Enjoy the round. Hope the org chart was worth it.

, the co-founder and CEO of , is an entrepreneur and product leader with more than 20 years of experience across cybersecurity and AI. He has built three generative AI companies, including one that reached unicorn status. Gurtu is known for turning advanced AI into scalable, real-world platforms, and previously contributed to successful exits, including acquisitions by , and , and a public company, . He holds a master’s degree from the and CISSP certification.

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How would you handle a junior employee questioning the way you���ve always done something? Might you roll your eyes and dismiss their comments as naivety? Or would you indulge their curiosity?

As AI has made knowledge accessible on a scale never seen before, companies are becoming leaner and operating faster. What once took a large team months to do can now be done by a handful of people in a few days.

It is undeniable that autonomous systems are changing the way we work. In the small and dynamic teams of the future, choosing the right humans to direct your AI systems will become make or break for a company.

As a six-time founder, I���ve learned the best workplaces are the ones where questioning things is the norm. Here���s how to build a team that questions orders as much as it obeys them.

AI by design

���AI by design��� doesn���t only mean building the right autonomous systems. It���s also about creating autonomous humans. You need to trust the human in the loop as much as you do the technology. The team around you ultimately shapes the company in ways you can���t control. So surrounding yourself with people you trust to make decisions when you���re not in the room is critical to success.

The nature of job roles is changing. A job description can be totally different from the one advertised by the time you���ve found a candidate, and a six-month roadmap is outdated by the time you���ve finished drawing it up.

The has stated that as AI reshapes the workplace. Hiring for a fixed set of skills won���t move the needle. The people worth investing in are those who are able to learn what comes next.

Hire for curiosity

Curiosity is the best trait you can hire for. When I look at a CV, it���s not just experience or academic credentials that draw me in. I look for what people have built on the side. What have they made on their own initiative?

Hire for curiosity, and you���ll create an environment where people are willing to throw new ideas around and challenge outdated ways of doing things. If your team is worried about saying the wrong thing, they won���t end up saying the right thing either.

In a world where technology is turning everything on its head, the companies that will thrive are the ones with curious people who are able to adapt to change quickly.

Hand over real responsibility

Employees with autonomy operate faster. They make better decisions because company vision is not abstract to people who are given real responsibility to drive it. Being involved in strategic direction stitches an employee into the fabric of the company and keeps them engaged.

Trust your employees to know what isn���t working. Allow people to pursue new ideas and reinvent things. Your employees are likely to spot potential problems before you do when they���re closer to the product. Make sure your team has the autonomy to try to fix them before they take hold.

Boredom is a big business risk

As companies become smaller, employee retention is more important than ever. Losing your best people is costlier when you have fewer of them to begin with.

The effects of a bored employee surface quickly in a small team. Boredom makes talented people a little bit slower, and a lot less likely to try the difficult thing.

The challenge for modern leaders is keeping your team engaged and interested. A bored employee is more likely to be swayed by a flattering recruiter.

Make sure to invest in development, keep your team learning, and always encourage curiosity. Give people autonomy and responsibility from the beginning, and boredom has nowhere to take hold. The mentality of risk and the drive to challenge something outdated is what you need to succeed in the changing work environment.

Dare to be a beginner, and teach your team to do the same. That junior employee questioning how you’ve always done things could be the most valuable person in the room.

is co-founder and CEO of Stockholm-based , an agent-driven, game-based learning platform. He has experience building, exiting and scaling digital companies across 70 countries. Uniplay is his sixth company to date.

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European AI-focused startups raised $23 billion in the first half of 2026, up 130% year over year and accounting for 55% of the region���s venture funding, according to a joint 做厙勛圖 and HumanX . That investment surge is sharpening a question at the heart of the sovereign AI debate: Where should countries concentrate their resources to capture the technology���s economic value and retain control over their data?

But sovereignty does not require owning every layer of the AI stack, according to two executives I spoke with onstage at the conference: founder and CEO and , ���s chief product and technology officer.

Their perspectives from Europe and the United Arab Emirates, respectively, pointed to opportunities in specialized chips and applications and underscored how purchasing decisions, government mandates and access to computing power can determine whether AI ambitions translate into growth.

Five-layered cake

, CEO and president of chip giant , has detailed a ������ to deliver AI that includes�� energy, chips, infrastructure, models and applications.

For Del Maffeo, whose company develops chips for inference, the opportunity lies in the semiconductor layer, as more AI processing moves beyond centralized data centers and onto devices.

���Artificial intelligence will expand from cloud computing, from centralized data centers, to devices closer to us in the physical world,��� he said. ���To enable this, you need specific chips which can run efficiently, at a lower cost, to connect these networks that today are running in the cloud. We are here to solve this problem.���

Five-year-old Axelera AI has two generations of chips it sells to around 600 customers. The company next plans to expand to products for decentralized cloud computing.

AI transformation

Abu Dhabi-based AI71 partners with large organizations and government agencies to help them benefit from AI transformations.

The United Arab Emirates has the largest compute per capita in the world and has a three-month mandate for every government agency to set up agentic processes for its citizens, according to Ghissassi. Energy is abundant and cheap. Over the next two years, the goal is to reach half of every citizen���s interactions with the government with an AI agent, he said.

Competing at the model layer does not make sense, said Ghissassi. He believes there will be two, three or four companies that can afford to be in the race, given the amount of capital required and the fact that it commoditizes very quickly.

The application layer is the one that is really important, for sovereignty where you want to own your data, said Ghissassi, who previously led product development at . ���You want to make sure that it stays with you, be it that you���re a government or an enterprise. If you���re giving away your trade secrets and know-how, nobody stops whoever is being a provider to you today, from replacing you.���

In the UAE, ���what helps is the mandate, the pace at which things happen, the availability of compute, both in terms of sovereign clouds, or on-prem, or global clouds, and then the amount of capital that is being invested to help transform these companies to benefit from these technologies,��� Ghissassi said.

By contrast, Europe struggles as it is a net importer of energy. It has strengths in the semiconductor industry but lacks all the real compute for AI, in neural networks and frontier labs.

���We should not be obsessed with controlling the entire stack,��� said Del Maffeo. In Europe we have to create value instead of just paying for a service, he added. ���Creating value means creating a wealthy economy.���

Europe���s strengths include its large pools of research talent and its population of 440 million people who can benefit from AI. However, the culture of large businesses purchasing from startups is less established, meaning it doesn���t have the same flywheel for growth seen in the U.S., said Del Maffeo.

���What worries me is that we are a little bit lagging behind, and therefore we are missing this value creation, and this will weaken the economies of Europe,��� he said.

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From January through August U.S. tech layoffs reached at least 94,046, up 16.8% from 80,486 in the same period of 2025. Interestingly, and unsurprisingly, many of the cuts came as tech companies redirected spending toward AI and restructured operations to reduce costs.

The year started off on a busy note on the layoff front. After job cuts dropped sharply in December 2025 to 5,151, they surged in January to over 20,000. May was particularly brutal. The month drove the year-to-date increase, recording 31,513 layoffs ��� including ���s 8,000-job reduction ��� the highest monthly count since March 2023, when layoffs reached 36,602.

Recent months indicate a slowdown. Layoffs fell each month after May, reaching 2,347 in August. Overall, June-August 2026 layoffs totaled 19,331, down 16.2% year over year. The decline suggests recent easing, though it is too early to establish a lasting reversal.

Artificial intelligence has become a much more common explanation for layoff decisions, noted , founder of AI was cited in 33% of tech layoff events this year, up from just 1% in 2024. His tracker attributes 92,913 layoffs globally, or 72% of this year���s total, to AI.

���There���s been little evidence that AI is actually replacing the work of the human employees let go,��� Lee said of this year���s largest AI-attributed layoffs. He believes established tech companies are spending heavily on AI and cutting costs elsewhere, hoping to increase productivity with smaller workforces.

Companies cutting

This year, we���ve seen a number of Big Tech and publicly traded companies, as well as startups, make deep cuts.

But interestingly, as with last year, public tech companies have dominated layoff headlines in 2026 so far, led by and Meta.

���Big companies [have] made up about 87% of everyone laid off in 2026, which is similar to last year, when they made up 85%,��� Lee said.

Amazon accounted for 17,388 cuts this year so far through August. Those included a 16,000-worker RIF announcement in January and several smaller subsequent rounds. Meta was next with 10,400 layoffs, including an 8,000-job reduction carried out in May that represented 10% of its workforce.

and recorded the next-largest totals, letting go of 4,800 and 4,760 employees, respectively. , and each recorded 4,000 layoffs, followed by with 3,000, with 2,900 and with 2,600. Notably, the Top 10 list spans a variety of sectors, including cloud computing, social media, payments and enterprise technology.

We should also note that according to reports, ���s workforce fell by about 21,000 employees in its fiscal year ended May 31, 2026, but the worker count and exact timing for each of�� those reported cuts was unclear, so we did not include that total in our tracker.

Among privately held companies in the tracker, recorded the largest disclosed total at 1,000, followed by HR software provider with 950 and with 500. Those figures were substantially smaller than the largest public-company reductions, although undisclosed layoff counts limit comparisons between the two groups.

And in early September, reportedly laid off 3,300 workers, or 10% of its workforce.

An AI focus

, of , says AI is affecting jobs in two ways. Some work, including coding, can now be done with fewer people. ���There are jobs that are literally being replaced by artificial intelligence,��� he told 做厙勛圖 News.

But companies are also changing their priorities. They���re putting more money into AI and cutting teams working on other parts of the business. ���They���re letting people go from one area of their organization while they might even be hiring in an area that is focused on AI,��� Challenger said. That���s why a company may lay people off and advertise new jobs at the same time.

Tech has announced more job cuts than any other industry this year, Challenger said. Across the U.S. economy, layoffs are down somewhat from last year, though that comparison is skewed by the large number of federal job cuts in 2025. When compared with the period just after the pandemic, when employers struggled to find workers, layoffs remain elevated.

Few companies outside tech have blamed job cuts on AI so far, Challenger said.

It���s not all negative though, in his view. There’s potential upside for programmers, he said. If AI makes software less expensive to build, companies in other industries might embark on projects they couldn���t afford before. That could mean new jobs outside tech, though it���s too early to know whether those jobs will make up for the ones being cut.

Also, it appears that some companies might be regretting their layoff decisions. Amazon is reaching out to eligible former employees about open roles across the company, including in its cloud-computing and AI businesses, according to a�� report.

Methodology

Layoffs figures are from The 做厙勛圖 Tech Layoffs Tracker, where we record reported job cuts at U.S. tech employers. The tracker includes layoffs conducted by U.S.-based companies or those with a strong U.S. presence ��� both privately and publicly traded ��� and is updated at least bi-weekly. Layoff and workforce figures are best estimates based on reporting. Actual layoff figures are likely much higher than reported as many companies do not disclose the number of jobs cut when announcing layoffs. For more about our methodology for tracking layoffs, refer to the tracker���s methodology section.

Related reading:

• The 做厙勛圖 Tech Layoffs Tracker

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A decade ago, Espahbodi co-founded aerospace and defense startup accelerator and moved back to the U.S. to expand it. On the advice of friends at , he opened an office in El Segundo, California, near , just as more alumni of that company were leaving to launch hard-tech startups of their own and next-generation defense startups including were emerging.

Espahbodi eventually sold his stake in Starburst and launched , which invests in companies spanning industrial infrastructure, manufacturing, energy and water desalination. The firm has backed 14 companies since making its first investment in January 2023.

He also advises federal agencies on working with nontraditional, venture-backed companies. In an interview with 做厙勛圖 News, he discusses how AI is changing hardware economics, why software investors are rushing into industrial technology, and what he believes many of them misunderstand about the sector.

This interview has been edited for length and clarity.

做厙勛圖 News: What led you to leave Starburst and launch Generational Partners?

Espahbodi: About four years ago, I noticed that my friends from SpaceX were leaving the space vertical and moving horizontally across physical industries. I reached an inflection point: I didn���t want to remain locked into the space sector. I wanted to follow my friends.

I sold my equity in the accelerator, and part of the investment team left with me to start Generational Partners. For the past four years, we���ve invested in what you might call the SpaceX-mafia and hard-tech sectors ��� anything involving industrial infrastructure, manufacturing, energy or water desalination.

We made our first investment in January 2023, in a North Dakota-based drone company. It was a trial by fire and an opportunity to prove the thesis. We���ve invested in 14 companies since then.

You were already investing in physical, safety-critical industries before the generative AI boom. Has AI materially changed where you invest, or has it mainly reinforced your existing thesis?

Espahbodi: I tend to arrive earlier than others. I embraced the idea that hardware does not have to be capital-intensive. People often confuse hard tech with deep tech, but nomenclature aside, you don���t need to invest in science to win in these categories.

AI has dramatically changed that narrative and encouraged more people to get on board. I���m not looking to invest in science. I don���t necessarily see opportunities in quantum computing, nuclear fusion or other technologies being spun out of laboratories.

People who worked at companies such as SpaceX, and laid their companies��� foundations digitally. AI has significantly improved that augmentation and performance, enabling these companies to tackle legacy industries more aggressively and, more importantly, with new business models.

Another major component of the AI question is that frontier labs have become more expensive and capital-intensive than traditional hardware companies. The success of frontier AI labs, combined with the SpaceX IPO becoming an enormous wealth-creation event, creates a new environment. It raises questions about what is truly capital-intensive, what makes a product or its intellectual property defensible, and where companies are reengineering products around different business models.

Hardware has historically been capital-intensive, slower to commercialize and difficult to scale. Under what conditions does its technical defensibility compensate for those challenges?

Espahbodi: Fundamentally, it comes down to the business model. I look for creative software talent combined with commoditized hardware, significant customer demand and a new business model.

One of our portfolio companies was founded by the team that built the factory for user terminals. When you buy a retail Starlink antenna, these people built and scaled the assembly line that produced it at high volume.

While deploying those terminals globally to provide internet access, they observed that poverty often stemmed from a lack of access to clean water. They asked whether they could replicate the proliferated satellite-and-user-terminal architecture for edge water desalination.

Rather than investing in multibillion-dollar, nation-state infrastructure like that used by Gulf countries, they wanted to mass-produce every component in a vertically integrated stack. Their goal was to produce a cooler-sized device that could clean water at the point of need.

used a digital, software-based approach to build the bill of materials needed for mass manufacturing. AI is part of its business and operations, but the company���s real innovation was inverting the infrastructure model and scaling it.

I helped Vital Lyfe win its first customers within the and . Those organizations can use its devices in the field rather than shipping pallets of bottled water by air freight. That created a signal for overseas partnerships and nonprofit humanitarian-aid applications. It showed that there could be a different way to provide clean water.

Those are the kinds of unique business models that excite me.

What other companies founded by SpaceX alumni demonstrate how hardware businesses can overcome the traditional challenges of the sector? What can these founders build today that would have been difficult five years ago?

Espahbodi: Another example is the team SpaceX recruited to build the autonomous drone ships that catch boosters in the middle of the ocean. The team included former Coast Guard personnel and oil-and-gas technicians.

At SpaceX, they had the freedom to use software and AI tools to automate station-keeping ��� the ability of those drone ships to position and navigate themselves and reach the right location.

That team spun out and brought in many former colleagues to change commercial maritime shipping. They retrofit legacy boats operating in harbors and waterways and move supply-chain goods.

They brought a digital-first foundation to automating the controls on tugboats and barges. That had never existed before because the communications link to those ships didn���t exist. Starlink changed the concept of operations. The company can use its software expertise to change how physical devices operate aboard these boats and allow their sensors to send signals anywhere in the world.

That makes it possible to retrofit and overhaul how legacy shipping vessels navigate harbors and waterways in the U.S. It���s another example of SpaceX alumni applying the playbook and technologies they learned at SpaceX to a much broader commercial industry.

You���ve said AI is eroding traditional software moats. What evidence are you seeing that investors are responding by moving into hardware and industrial technology?

Espahbodi: I meet many software investors who feel they���re missing out on hardware but don���t necessarily understand it. I���ve met beauty investors who now say they���re defense-tech investors.

Los Angeles is a hotbed of firms that historically invested in software, media or consumer packaged goods. But people forget that Southern California, particularly El Segundo, is the aerospace capital of the world and has the largest concentration of mechanical-engineering talent.

Across the region ��� from China Lake to San Diego ��� technicians, builders and vocational talent are intersecting with the democratization of software and access to AI tools. Many local VCs have never taken advantage of the hardware talent located around them, so they���re being thrown for a loop.

Ironically, Bay Area VCs have been among those leaning most heavily into this. But it���s happening everywhere. I���m in Washington, D.C., now, and one of the first investors in , the hypersonic missile company, was in Virginia ��� before and others became involved.

Los Angeles VCs in particular know there is a talent war underway and that many people are leaving established companies to launch new businesses in these categories. But they struggle to underwrite those deals. They don���t know how to distinguish a strong opportunity from fear of missing out or something merely cosmetic.

So investors��� lack of experience in the space isn���t deterring them from writing checks or competing for deals?

Espahbodi: You have to ask why. The answer is their limited partners.

Sophisticated allocators, such as endowments, foundations and pension funds, along with more FOMO-driven family offices and high-net-worth investors, are watching this wave of SpaceX, and Anduril alumni create new companies and raise extraordinary rounds.

Many of those companies are no longer raising solely to pursue intellectual property. They���re building war chests to acquire other companies. The lines between private equity and venture capital are blurring. VC-backed companies are doing private equity-style buyouts, while venture deals are bringing in private equity checks.

That leaves LPs pushing for more. The success of the frontier AI labs has also perpetuated a fear of a ���SaaS apocalypse,��� which I don���t think is real ��� although I sometimes question ���s 1��stock price for fun.

It creates what venture does best: tourists and FOMO. LPs ask why their managers aren���t investing in the same companies and how they can participate, raise more money and show that they aren���t missing out. That���s how I���ve seen investors unfamiliar with these sectors enter the market.

Some of the largest Silicon Valley firms … missed this dynamism wave. Now they���re leaning in hard, sometimes at ridiculous valuations for companies that have yet to produce anything.

If more venture funding continues to flow into defense, aerospace and industrial technology, what prevents hardware from developing the same problems software experienced, including too many competing companies?

Espahbodi: Bring it on ��� hard and fast, and as much as possible.

Venture as a category exists because it was always about hardware. I would argue that the SaaS era, from the dot-com boom until now, was a blip compared with what venture was originally intended to underwrite.

I would move away from the hardware-vs.-software distinction and ask who is reframing the business model. Is there a way to reengineer a combination of software and hardware to unlock customer value? That���s the more important question.

How important is geography for these startups? Does locating near a major government customer help a company win contracts, and how do startups navigate procurement if they aren���t based near Washington, D.C.?

Espahbodi: It���s a common misconception that Washington is where the money is. The Los Angeles Air Force Base houses , which is another way of saying it holds ���s wallet. El Segundo makes the purchasing decisions for the fastest-growing portion of the military budget.

Washington is a place of considerable activity that needs to be influenced. Venture has never had this degree of influence on an administration and its executive orders. We���re also seeing portfolio companies backed by influential investors win government contracts worth as much as $1 billion at a time. That���s extraordinary.

Geographically, companies need to be where the talent is as much as where the customers are. Government customers should signal what matters, but companies shouldn���t organize themselves entirely around the government.

My catchphrase is that I want everyone to be commercially focused but mission-aware. I don���t want them to be mission-focused on the government. I want government to signal what it cares about while companies remain commercially focused.

The talent war for this convergence of hardware and digital technology is centered in Southern California. If you aren���t building and recruiting there, you���re falling behind. I like that the Bay Area is trying to attract more hardware talent and capitalize on the automotive and humanoid-robotics markets.

But I think the talent base for the factory of the future starts in Southern California and can then be used as a model for expansion into other places, as companies such as Anduril have done in Ohio and Louisiana.

We invested in a company founded by people from SpaceX and . They immediately moved to Austin to build a smart factory for raw-material processing. They wanted to automate the process at its source.

The largest concentration of cotton farming is around Lubbock in the Texas Panhandle. The company is building automated factories from the ground up to mill cotton into yarn and then complete the digital, vertically integrated stack by producing textiles at prices that beat outsourcing to China, Vietnam and other countries.

It sounds crazy, but the founder is determined to do it. If you can prove the model in textiles, you can apply it to copper. If you can do it with copper, you can do it in pharmaceuticals. From there, it could go in any direction.

Do startups located near Space Systems Command have an advantage?

Espahbodi: Not for that reason alone. The advantage is that they���re part of the ecosystem and geography. They���re spending time in the same bars and restaurants, and their children attend the same schools. They���re witnessing the same velocity.

Space Force itself is facing greater demand than ever to protect assets in space. Whatever happens with funding for individual programs, it remains the fastest-growing portion of the Pentagon budget.

I don���t think startups should locate there solely to be close to the customer. They should be there for the talent they need to build.

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Related reading:

• Sector Snapshot: Space Tech Startup Funding Orbits New Highs
• Sector Snapshot: Defense Startup Funding Hits An All-Time Record As VCs Begin To Eye Exits

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