It was a challenging first half of the year for deal-making.

USM&A volume falling 8% in the second quarter and 50% year over year,

according to KPMG. But AI startups proved to be a bright spot

and that's the focus of today's tech check with dear gabosa.

Hi Dee. Good morning guys well as you heard from Steve Kovac earlier, Tech came roaring back this year, but it wasn't just public markets in the NASDAQ's huge outperformance, early stage startups, the potential next generation of tech companies. They also found a renewed financing landscape for the right kind of company.

Now overall the cadence of venture capital investing was slower and more cautious late stage companies

like Instacard and Striped they took valuation

haircuts over the last year or so but startups in the generative AI space they

found a much friendlier environment according to Pitchbook there are now more than 20 generative AI

unicorns or startups valued at a billion dollars or more. The biggest

rounds this year went to inflection, anthropic, generate biomedic, and adept all $300 million plus fundraises.

Now on Friday, I spoke to Reed Hoffman, a well-known VC that has backed a lot of the biggest names in this space including Open AI and Inflation, which he actually helped

a co-found. So I asked him what is next for the biggest generative AI companies and is it inevitable that

they get gobbled up by one of the mega caps?

Have a lesson.

If their AI business is one of the ones that requires a large scale compute,

almost for sure they'll have to be using one of the cloud providers now you know while

Microsoft has taken kind of an early lead in building us out you know Google is

obviously very strong Amazon's working on it oracle is working on it there's a whole stack and so I think that enables an

ecosystem and once you have, you know, one of the things about the discussion of large tech companies

is I think where, you know, seven large tech companies heading to 10, not to three.

And so that gives you the competitive space

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