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A $6.3B Israeli exit, the neocloud boom and AI’s adoption gap

Published 8 days ago • 1 min read

The Weekly Dispatch

Top posts from this week

Hi friends,

Another week, another multibillion-dollar Israeli tech deal. Varonis has agreed to be acquired by Proofpoint for $6.3 billion in cash, while Amazon is reportedly in talks to acquire Decart for around $7 billion. Alongside the headlines, I’ve been thinking about where the next generation of founders can build lasting businesses as AI changes both the infrastructure we rely on and the work we do.

It was a week of firsts and seconds. Gemini 4 Argon reached developers broadly at roughly a fifth of rival prices, and Meta shipped Muse Wonder, its first frontier-class model, so the frontier got both cheaper and more crowded.

This week on VC Cafe, I explored two sides of the value chain of AI: the rise of neoclouds (from 209 a year ago to 323 today), and the gap between what AI can do and what customers can reliably use base on Sequoia's Pat Grady. There’s also a packed edition of #FIRGUN, complete with flying cars.

Let's dive in!

Eze

Recent articles

Weekly #FIRGUN Newsletter

This week's roundup: Zenzap, Pluto, Axionic, Uvi, three Israeli exits, and the wider tech world, from Gemini 4 Argon to DeepSeek's reported $14B round.

The neocloud boom and the race to outlive the GPUs

Capital is flooding into GPU clouds. Can they recover hardware costs before newer chips erode its value, and keep customers by moving into managed software?

The AI opportunity hiding between capability and adoption

An impressive AI demo takes seconds. Changing how a business operates can take years. Sequoia’s Pat Grady calls the distance between the two the “diffusion gap”, and it creates a substantial opening for application startups.

Quote of the week:

“Too bad that all the people who know how to run the country are busy driving taxicabs and cutting hair.”
George Burns

Chart of the week

A year ago, there were 209 neoclouds... now there are 323. (source)

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