"Big Bets on AI, Policy Shifts, and Corporate Moves Shape a Dynamic Market Landscape"

24th July 2025

AI startups raised $104.3 billion in the U.S. during the first half of the year, but exits remain limited, with most coming from smaller acquisitions rather than IPOs. Uber is introducing a feature that lets women riders and drivers choose to be paired with other women, aiming to improve safety and comfort. IBM beat earnings expectations thanks to strong mainframe sales, but weaker software revenue disappointed investors. Former President Trump announced a major trade deal with Japan, including $550 billion in investment and reduced tariffs, though U.S. automakers criticized the agreement. Across all sectors, investor enthusiasm remains strongest in AI, particularly in vertical applications with real enterprise value. All in today’s Read It and Eat !

Major Headlines 

AI Startups Raise $104B in H1  But Exits Paint a More Subdued Picture

AI startups are attracting unprecedented levels of funding, with U.S.-based companies raising $104.3 billion in just the first half of the year, nearly equal to the total raised in all of 2024, according to PitchBook. AI now accounts for nearly two-thirds of all U.S. venture capital funding, up from 49% last year. Industry giants continue to lead the charge: OpenAI raised $40 billion in March, Meta invested $14.3 billion in Scale AI, and Anthropic pulled in $3.5 billion. Even early-stage ventures like Safe Superintelligence, founded by OpenAI’s Ilya Sutskever, have managed to raise $2 billion.

Despite the flood of capital, actual exits tell a different story. PitchBook data shows just 281 VC-backed exits totaling $36 billion so far this year. While there have been a few notable moves  such as CCC Intelligent Solutions acquiring EvolutionIQ for about $700 million, and Slide Insurance going public with a $2.3 billion valuation the bulk of exits are smaller acquisitions rather than blockbuster IPOs. CoreWeave has been an exception, going public at the end of Q1 and watching its stock surge 340% in Q2, pushing its valuation above $63 billion.

Analysts say the exit market is largely shaped by strategic, lower-value acquisitions or “bolt-on” deals  as larger companies absorb smaller AI startups to enhance their own offerings and boost future valuations. “The dominant exit trend right now is frequent but lower-value acquisitions and fewer IPOs with significantly higher value,” said PitchBook’s Dimitri Zabelin. Vertical AI applications, which address specific industry needs, are also gaining traction as they plug easily into existing enterprise systems.

Outside of AI, venture activity remains subdued. Fintech funding dropped 42% to $10.5 billion in the first half of the year, while sectors like cloud software and crypto have also seen sharp declines. Still, optimism lingers: if macroeconomic conditions improve and interest rates fall, IPO activity may pick up. For now, investors remain eager to back innovative AI companies  especially those developing targeted, vertical solutions with real enterprise value. CBNC 

Uber to Let Women Riders and Drivers Choose to Be Paired with Other Women

Starting next month, Uber will pilot a new feature in the U.S. aimed at giving women more control over their ride experience. The feature allows women riders to request female drivers and gives women drivers the option to accept rides from women only. It's a move the company says is designed to increase comfort, choice, and safety for women on the platform.

“This is about giving women more choice, more control, and more comfort when they ride and drive,” said Camiel Irving, Uber’s VP of U.S. and Canada operations. While the preference isn’t guaranteed, Uber notes that enabling it will significantly increase the chances of a woman being paired with another woman. The pilot will roll out first in Los Angeles, San Francisco, and Detroit.

Uber has tested similar features in other countries, including France, Germany, and Argentina. It also introduced a gender-based driver preference in Saudi Arabia in 2019, after women gained the legal right to drive. That feature was eventually expanded to around 40 countries. According to Uber’s own data from 2015, women made up roughly 20% of its U.S. drivers.

The update comes amid ongoing concerns about safety in the ride-hailing industry. Uber and its competitors, like Lyft, have faced criticism and legal challenges over incidents involving harassment and assault. In response, both companies have introduced a range of safety features in recent years, from teen accounts to rider verification. Lyft, for example, rolled out a similar driver-rider gender pairing option in late 2023, catering to women and nonbinary users. CBNC 

IBM’s Software Stumbles Despite AI Mainframe Momentum

IBM beat expectations for second-quarter revenue and profit, but weaker-than-expected software sales took the spotlight. While demand for its AI-powered mainframes drove infrastructure revenue higher, software sales came in at $7.39 billion just below analyst estimates.

Investors, who had been betting on strong software growth, responded with a 5% drop in after-hours trading. CFO Jim Kavanaugh noted that spending shifted toward mainframe hardware, dampening transaction processing sales within the software segment.

Consulting revenue rose 3%, ending five straight quarters of decline, and IBM’s AI-related business grew to $7.5 billion. Despite the overall beat, IBM remains cautious about near-term growth and did not issue guidance for the next quarter. Bloomberg 

Trump Announces "Massive" Trade Deal with Japan

President Donald Trump has announced what he describes as a “massive” trade agreement between the United States and Japan — a move he claims marks one of the largest trade deals in history. Under the agreement, Japan is set to invest $550 billion in the U.S., and its exports to America will be subject to a 15% tariff — notably lower than the 25% Trump had previously threatened.

According to Trump, Japan will also open its markets more broadly to U.S. goods, including vehicles, agricultural products like rice, and other key exports. “It’s a great deal for everybody,” he said during a White House event, emphasizing that both sides worked “long and hard” to reach the agreement. Japanese Prime Minister Shigeru Ishiba welcomed the deal, noting that the agreed tariff rate is among the lowest for countries with a trade surplus with the U.S.

The agreement is expected to have a major impact on Japan’s automotive industry, which makes up nearly 3% of its economy. In 2019 alone, Japan exported around $410 billion worth of vehicles to the U.S. While Japan agreed to lower tariffs on American vehicles and parts from 25% to 15%, it will not reduce tariffs on its own imports. That decision has drawn criticism from U.S. carmakers, who argue the deal unfairly favors Japanese manufacturers while keeping stiff tariffs in place for American-made cars shipped from Canada and Mexico.

The deal comes as part of a broader U.S. trade push. The Trump administration also announced a new agreement with the Philippines, setting tariffs at 19% for imports from the Southeast Asian nation. Analysts say Japan’s commitment to invest in U.S. manufacturing aligns with Trump's goal of revitalizing the American industrial base. Meanwhile, Japan's Nikkei 225 surged 3.5% on the news, boosted by gains in major auto companies like Toyota, Nissan, and Honda. However, the announcement arrives at a politically tense time for Prime Minister Ishiba, whose party recently lost its majority in the upper house of Japan’s legislature. BBC 

Minor Headlines 

• BT Appoints Patricia Cobian as First Female CFO, Marking a Milestone for the Telecom Giant. CityAM 

• Lloyds Bank Surpasses Expectations with 5% Rise in First-Half Profits. CityAM 

• FTSE 100 Hits Record High as Investors Weigh Earnings, the Nasdaq and S&P also hit an All time high with U.S. Japan Trade DevelopmentsReuters 

• Tesla Earnings Slide Again; Musk Warns of More 'Tough Quarters' Ahead. Bloomberg 

• TotalEnergies Sees 23% Drop in Quarterly Profit Amid Softer Oil and Gas Prices. Reuters 

• American Eagle Shares Surge in After-Hours Trading Amid Renewed Meme Stock Momentum. Yahoo.Finance 

• AI-Driven Advertising Set to Power Growth in the Global Media and Entertainment Sector. Yahoo.Finance 

• Google Tops Q2 Estimates, But Rising Capital Expenditures Weigh on Stock. Yahoo.Finance 

Gen Z Word of the Day 

Snatched

If someone is looking snatched, they look really good, particularly their outfit.