Tech Brew Ride Home - The End Of Year M&A Rush

Episode Date: December 30, 2025

This flurry of M&A deals at the end of the year (I have another one to tell you about) are people getting out while the getting is good, or is this just the start of what’s going to be a big deal in 2026? And are half of the big VC raises we’re seeing just folks trying to build up cash reserves to hedge either way? Meta to Buy Manus, an AI Startup With Chinese Roots (Bloomberg) After a Year of Blistering Growth, AI Chip Makers Get Ready for Bigger 2026 (WSJ) AI start-ups amass record $150bn funding cushion as bubble fears mount (WSJ) Microsoft’s Nadella overhauls leadership as he plots AI strategy beyond OpenAI (FT) Waymo and Other Driverless Taxis Move Into a New Era (Bloomberg) Listen to This: Some Audiobooks Are Outselling Hardcovers (WSJ) Learn more about your ad choices. Visit megaphone.fm/adchoices

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GoogleFi Wireless is not subject to data traffic deprioritization during times of high network usage. Welcome to the Tech Brew Ride Home for Tuesday, December 30th, 2025. I'm Brian McCullough today. This flurry of M&A deals at the end of the year, I have another one to tell you about today. Are people getting out while the getting is good, or is this just the start of what's going to be a big deal in 2026? And are half of the big VC raises we're seeing just folks trying to build up cash reserves to hedge either way? Here's what you miss today in the world of tech. If you're looking for Enterprise Grade Identity Automation minus the enterprise-grade baggage, aka having your users log-on 500 times. Yesh ID delivers advanced IAM automation

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happen right at the end of the year, but META has agreed to acquire Singapore-based startup Manus. You might remember them from earlier in the year. They made a splash with an AI agent that folks said was possibly a chat GPT moment for agents. They largely make AI agents for small and medium businesses. Manus said earlier in December, its annual revenue run rate had already passed $125 million a year, quoting Bloomberg. The deal values Manis at more than $2 billion, according to people familiar with the matter. It marks a rare U.S. acquisition of an Asian tech company and the latest multi-billion dollar AI business. from Meta Chief Executive Officer Mark Zuckerberg. The agreement was struck in about 10 days, the people said, asking not to be identified as the details are not public. Meta intends to continue operating and selling the Manus service while also integrating the technology into its products, it said in a statement. Backed by some of China's biggest names, including Tencent Holdings, Zen Fund and HSG Manus shot

to prominence earlier this year, not long after Deep Seeks debut. All of its existing investors have been bought out in MetaSend, Takeover, one of the people said, it's unclear whether severing Chinese ties will ease government concerns at a time when the Asian nation and the U.S. are vying for AI dominance. There will be no continuing Chinese ownership interest in Manus AI following the transaction, and Manus AI will discontinue its services and operations in China, a meta-spokesperson said. Manus's parent company Butterfly Effect was founded in China before moving to Singapore. The Manus AI agent can complete a handful of general tasks such as screening resumes,

creating trip itineraries and analyzing stocks in response to basic instructions. Butterfly Effect raised money earlier this year at close to a $500 million valuation in an investment round led by U.S. Venture Capital Firm Benchmark, end quote. So obviously there's a few questions here that I kind of don't have decent answers to yet. What is Meta went with an AI agent? It would seem like the real money, at least at first, in AI agents would be to service the enterprise or again SMBs like they're already doing. if they were attempting to raise at a $2 billion valuation and meta took Manus out at that exact

valuation, this sounds like a straight talent acquisition right? Thirdly, is there some reason a bunch of these deals are happening now? Do people see something coming down the pike that they want to get ahead of? Don't know. Here's the journal's background reporting on this deal as I attempt to read the strategy T leaves here. Is this signaling a meta pivot to selling enterprise services, at least for AI. I said earlier this year with their social media base, meta was possibly the best positioned to get Normies to adopt AI, but what if they don't really see a market there? Quote, Manus gained a wide following after previewing an AI agent in March that was capable of producing detailed research reports and building custom websites using AI models developed by

companies such as Anthropic and China's Alibaba. That demo followed the release of Deepseek, a made-in-China AI model that rocked Silicon Valley due to its advanced capabilities, coupled with claims by its developer that it was developed with far less computing power than American rivals. The deal is a move in a new direction for meta, which is investing aggressively in AI to compete with Google, Microsoft, and OpenAI. The deal would help the social media giant cement its position in the product segment of AI agents, an increasingly intense battlefield of AI companies that make tools to conduct complex tasks with minimal human input. Microsoft has operated a popular AI assistant known as co-pilot. We plan to scale this service to many more

businesses, Meta said in its announcement about the deal. Meta's existing AI offerings are widely available free in services including Instagram and WhatsApp, and the company has also fully integrated AI into its advertising in ways that have fattened its bottom line, according to analysts, end quote. A few year-end looks back and year-end looks ahead stories for you now. Driven by the AI boom, chipmakers posted more than $400 billion in sales in 2025. And guess what? 2026 looks like it will be even better, unless larger factors intervene, which they very much can. Quoting the journal. Goldman Sachs estimates that Invidia alone will sell $383 billion worth of GPUs and other hardware in the 2026 calendar year,

an increase of 78% over this year. Analysts polled by FactSet estimate that the combined sales from Nvidia Intel Broadcom, AMDM, Qualcomm, will top $538 billion. That doesn't include revenues from Google's TPU business or Amazon's custom chip sales, neither of which are broken out by their parent companies. Yet 2026 could also bring unprecedented challenges. A shortage of components such as electrical transformers and gas turbines, hamper's data center construction and operators struggle to secure the immense amounts of electrical power required to run computing clusters. Another major challenge, a global shortage of components that go into AI data center servers. items in short supply include the ultra-thin layers of silicon substrate, some chips require, and memory chips, the semiconductors that feed data data data processors and help store the results of computations.

As data center construction has ramped up and demand has risen for inference, the need for more high bandwidth memory chips has surged. This is in part because AI inference workloads are more likely to be memory bound or constrained by having enough accessible memory capacity than our training workloads, which tend to be limited by the power of the processors used. We're significantly short of our customer's needs and it's going to persist for a while, said Summit Sanda, chief business officer of Micron Technology, one of the largest makers of the high bandwidth memory chips used in AI. There's a chance that 2026 is a peak, said Gil Luria, an analyst with D.E. B.A. Davidson, if it's the end of March and we don't hear that Open AI has raised $100 billion, then the market may start pumping the brakes. As more chip companies launch AI products, there is also some concern about pressure on profit margins. Broadcom's stock sank even after the company reported record quarterly revenue in December, in part over investor worries that

going forward, sales growth will be slow for its higher margin product lines, end quote. But whither the AI startups in 2026, we've been talking about how everybody is suddenly hedging in case there is an AI bubble about to burst sometime soon. And this includes even the AI startups themselves. In fact, mega raises of VC in AI startups not related directly to data centers is actually an increasing sign of caution. Quoting the FT, Silicon Valley's hottest startups have raised $150 billion in funding this year as their financial backers advised them to build fortress balance sheets to protect them in case the artificial intelligence investment boom turns to bust in 2026. Pitchbook data shows

that the biggest U.S. private companies raised a record hall in 2025 smashing the previous high of $92 billion raised in 2021, with investors rushing to back top AI groups such as Open AI and Anthropic. Venture capitalists and industry experts said the money would help insulate founders against an investment downturn as public markets begin to fret over heavy spending on AI infrastructure as well as fueling growth. You should make hay while the sun is shining, said Lucas Swisher, a partner at KOTU, who has backed OpenAI, data bricks, and SpaceX. 2026 might bring something unexpected when the market is providing the option build a fortress balance sheet. A number of investors said they had advised startups to build reserves while enthusiasm remained high about AI's potential to transform the economy.

The biggest risk for startup founders is you don't raise enough money. The funding environment dries up and your business could go to zero, said Ryan Biggs, a co-head of venture investment at Franklin Templeton. Or you can take a little dilution, and if the business works, it truly doesn't matter. you're still extraordinarily wealthy either way. On average, startups raise new funding rounds every two to three years, according to Carter, a software group that tracks private markets. But recently, the best-performing AI startups have been returning to investors within months, even as funding dries up for many smaller startups.

Investors are gravitating to those late-stage deals where there is more certainty of who the winner is, said Biggs. There are a dozen companies you want to be in. Beyond those, it's a challenging landscape. A further driver of 2025's fundraising boom is that, leading AI groups are growing at a far faster rate than past tech startups. The valuation of any sphere, maker of the cursor coding tool, has gone from $2.6 billion at the start of the year to $27 billion in November. Over the same period, its annual recurring revenue, a metric favored by fast-growing startups, increased roughly 20 times to $1 billion.

Perplexity, the AI search engine seeking to challenge Google has raised money four times in the past year, despite its executives saying they do not require more cash. investors also said founders of the biggest startups are balking up their balance sheets to take advantage of acquisition opportunities, particularly if investor sentiment turns next year and smaller rivals struggle to raise new funds. Put on your seatbelt, said Jeremy Krantz, founder of VC firm Sentinel Global and former head of technology investment at Singapore and sovereign wealth fund GIC. It'll be like an acquisition a week the minute there's a spook in the public markets. These guys will take their $500 billion market cap as a private company and start buying all over the point. place, end quote. So maybe that answers one of the questions in the first segment.

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Sacha is in founder mode, said D. Templeton Deputy Chief Technology Officer at Microsoft, referring to the hands-on leadership style coined by Paul Graham, an influential Silicon Valley investor. People close to Nadella say he is also focused on the increasing competition from Amazon and Google, both once seen as AI laggards, which are making sharp. progress in the infrastructure and model development areas. Microsoft 365's AI assistant co-pilot surpassed 150 million monthly active users the company disclosed to investors in October, but this remains short of the about 650 million users reported by Google for its Gemini chatbot and the 800 million by OpenAI for chat GPT. At the same time, startups such as Anthropic, Annesphere,

and Replit are eating into Microsoft's market chair for AI coding tools. To respond to these pressures, Nadella has shaken up the company's leadership. and his own management approach. He has instituted a weekly meeting that brings together employees to discuss some of these competitive pressures. The sessions reflect an effort by the Microsoft chief to meet individuals outside his executive team and encounter new ideas and talent, according to people familiar with the matter. Sacha is trying to demonstrate a sense of urgency, said one Microsoft executive. The goal is to get out of some of the structures that exist and make the route to him easier, end quote. In Business Week this week, Bradstone says what

I've been saying a while now, we'll likely look back at 2025 as the year's self-driving cars stopped being theoretical and started getting real, which should only accelerate in 2026 and beyond. Up and to the right, people, quote, if you live in one of the handful of major cities where Waymo and its rivals operate a driverless car service, 2025 felt like the year robotic taxis became ubiquitous and, apart from a few snafus, reliable. Waymo's recognizable white electric Jaguar SUVs with their spinning suite of sensors on the roof and an LED display beckoning writers by their initials fills the road in six cities, including Atlanta, Austin, and Phoenix, and deposits passengers at restaurants, music venues, and sporting events as routinely as conventional

cabs do. Tesla is ramping up its competing taxi service in Austin and San Francisco, where safety drivers are at the wheel for now, while Zooks, a division of Amazon transports passengers in its carriage-style robotaxies, Sons steering wheels or pedals in Las Vegas, Miami, and Seattle, battle among other places. Because tourists and business travelers routinely visit these particular cities, quote, this was the year that a lot of people for the first time downloaded an app and paid for an autonomous vehicle ride on their own, says Riley Brennan, a partner at Trucks Venture Capital. Now it feels like a promising spring for the industry. Waymo said in an end of year blog post that it serves more than one million fully autonomous rides each month and is on a path to hit that

benchmark every week by the end of 2026. If anything, 2025 seemed like the year the industry moved from testing its technology to experimenting with its business model. In Los Angeles, Phoenix in San Francisco, Waymo asks users to download the Waymo app to directly summon a driverless car. In its other cities, it's foregoing a consumer brand entirely and making its cars available through Uber. You wouldn't see another company running these types of geographically different examples of how the business runs, Brennan says. I think down the road there will probably be some great case studies about what they're doing. For Tesla or Waymo, that could unlock the magic of the now profitable ride-sharing companies Uber and Lyft. They don't have to pay drivers who are

twiddling their thumbs during slow times or add more cars to the road in periods of peak demand. They simply lower or raise fares and more drivers either stay home or hit the road. Until the autonomous taxi companies figure out that kind of dynamic supply, they'll probably continue to lose money, even if you can look down the street and see a line of cars without drivers that herald our inevitable future, end quote. Finally today, on a slightly different tip, something I did not know. Audio books apparently boomed in recent years, and though that growth has slowed a bit this year, increasingly audiobooks are outselling other forms of media for some titles. In other words, audiobooks are outselling regular books, quoting the journal.

Author S.A. Cosby's Southern Crime novel, King of Ashes, was a critical hit and a New York Times bestseller earlier this year. But more of Cosby's fans have listened to the story than read it. The audiobook narrated by actor Adam Lizar White has outsold the hardcover edition, according to its publisher McMillan Audio. Cosby has had the same narrator for multiple novels giving listeners a sense of consistency. He said in an interview that getting the audiobook via Audible, at a price point lower than the hardcover, also made it more accessible. Print book sales through December 6th, we're down 1% to $679 million from the same period last year, according to BookTracker Sircana Bookscan. Publishers are increasingly competing with streaming services,

podcasts, and other media for readers' attention. But digital audiobook sales have been on a tear in recent years and jumped by nearly 24% in 2024 to $1.1 billion, according to the Association of American Publishers. Their growth slowed this year with a 1% increase through October to nearly $888 million. It's the natural roller coaster of any product that does well, said veteran audiobook narrator Rich Miller. I don't think the run is over. The audiobook edition of Callie Hart's best-selling Romanticie Brimstone, which published November 18th, sold nearly 531,000 copies through December 13th, according to Los Angeles-based Podium Entertainment. Sales will easily top 1 million in the first half of next year, said Scott Dickie, Podium's chief executive.

It can also help to be a professional entertainer. Nate Bargazzi's story collection Big Dumb Eyes made its debut at number one on the New York Times hardcover nonfiction list when it was published in May. The audiobook still outsold that edition by a substantial margin according to the publisher. For comedians, their voice and delivery is a huge part of what get them a huge audience, said Ben Sevier. President of the Grand Central Publishing Group, quote, Nate came with an audience conditioned to wanting to hear his voice, end quote. So I waited the better part of a week to talk again about Pluribus, the TV show on Apple TV. I'm not going to go heavy into spoilers, but if you are considering giving Pluribus a go and don't want to have anything at all spoiled, turn the show off now, I guess.

I'll pause here for a second. Okay. So yeah, what felt like a rote zombie apocalypse show, for the most of the first episode, at least, became something much more interesting in the second episode. and beyond, right? At least to me, I thought it was the most interesting show of the year. Zombie Apocalypse, but what if the zombies were kind? Literally couldn't hurt a fly and maybe are living the ideal life of love, peace, and harmony? Lots of people have made the point that in 2025, Plybis reads as an AI parable or metaphor, and I think it does, but in a slightly subtler way than some people are saying. Subtler than just that the zombies like AI,

try to please you, have access to all knowledge at all times, and you can get them to be sort of your sex fantasy avatar if you want them to. The AI analogy is, in my opinion, really about the idea of people who say, yeah, this AI stuff looks great, and you're telling me it's going to be wonderful, but A, I'm not convinced of that yet, and more importantly, B, what if I want to opt out anyway? There's a lot of people out there with this opinion. I was reminded of that by visiting with my family over the recent holidays, that large swaza people are like Carol versus the zombies in Pluribus. They're like, you might be right.

Our AI future might end up being all rainbows and lollipops, but I didn't sign up for this. I didn't agree to have all of society change in some fundamental way, and I feel like I have no control over whether it's happening or not. So again, can I just say no thank you? Am I the crazy one for saying no thanks? And if the whole world signs up to join the hive mind, is the whole world crazy?

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