What A Recession Means For Tech & AI?

WHAT’S INSIDE

• Tech In The News: Tariff, Superhuman AI 2027? Chip Crisis, Hands Off Protest

• Companies to watch: SignalFire, io Products, Rippling, SandboxAQ, Cassava

• Feature: What Does A Recession Mean For Tech and AI?

• Buzzy Tools: Latest Buzzy tech, AI and financial tools

• Deep Tech: The latest in deep tech, biotech, futurism and more

• Space Tech: Latest news in the space race and aerospace tech

• Crypto: Blockchain and crypto policy and startups or protocols to watch

TECH IN THE NEWS

Tariff Turmoil — US stocks, indexes fell for a third day amid escalating tariffs. Recession odds hit 70% on Kalshi, the White House denies a tariff pause rumor.

EU Finance Ministers to meet to discuss Tariff responses saying the EU proposed a "zero-for-zero" tariff free-trade deal before Trump’s order. Elon Musk also called for a U.S. /Europe zero tariff trade zone, criticizing Peter Navarro's economic stance.

Superhuman AI by 2027? — A report by ex-OpenAI researcher Daniel Kokotajlo’s AI Futures Project forecasts superhuman AI emergence by 2027 posing major risks.

Chip Crisis Intensifies — Chip stocks are plummeting as new tariffs imposed by Trump raise concerns. Increased chip prices could reduce demand for electronics as costs are shifted to consumers, impacting the market.

Global Protest Wave — Hundreds of thousands gathered across 1,300 US "Hands Off!" protests against Trump and Musk. Millions reportedly participated worldwide.

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COMPANIES TO WATCH

SignalFire — A VC firm specializing in seed and pre-seed investments, SignalFire has raised over $1B, increasing its total AUM to ~$3 billion. The firm utilizes data-driven strategies and AI integration to maintain its competitive edge.

io Products — Sam Altman and Jony Ive’s Laurene Powell Jobs’ and Emerson backed AI hardware startup may be aquired by OpenAI for $500M. It is poised for significant growth.

Nvidia & Cassava — Nvidia partners with Cassava Technologies to establish Africa's first AI factory via a $720M investment to deploy AI and computing software across the continent.

Rippling — The HR SaaS startup is negotiating to raise hundreds of millions at a $16B valuation despite ongoing legal challenges. It is attracting significant investor interest.

SandboxAQ — The AI startup specializing in quantum computing and AI solutions, secured an additional $150M in its Series E round from Google and Nvidia, its valuation has climbed to $5.75B, signaling strong growth and market potential.

Heron Power — Former Tesla executive Drew Baglino founded startup revolutionizing the electric grid with solid-state transformers is seeking $30-$50M in Series A funding to enhance renewable energy efficiency and stability.

See our full list of the companies to watch for last week here

THE HOTTEST THING IN TECH
What Does A Recession Mean For Tech and AI?

April continues to deliver massive disruption for the U.S. economy, markets, and to the prospects for tech firms, investors, and consumers. Major developments this week, triggered by the tariff-induced market chaos, include the launch of Meta’s Llama 4 models, news about tariffs affecting GPUs and chip markets, and investment markets showing signs of drying up. All in all, none of this spells great news for tech and AI markets in the short-term, but is there a silver lining for AI adoption?

Macroeconomic Storm Clouds

The Trump administration's ambiguous GPU tariffs have caused chaos across tech sectors, impacting major chipmakers like Nvidia, AMD, and Intel. Increased infrastructure costs and disrupted supply chains directly threaten many tech and AI firms' potential for innovation and profitability. The Information reported yesterday that tariff hikes are already starting to chill spending on enterprise software, startup M&A, and VC funding according to investors and startup consultants.

What a Recession means for AI

On the other hand, Rob Howard of Innovating with AI highlighted exactly how Trump’s unilateral and restrictive trade policies might accelerate the adoption of AI across the workplace and society. The sequence: Tariffs dramatically increase the cost of imported goods > pushing companies toward workforce reductions > accelerating adoption of automation and AI rather than domestic factory investments. Long-term, this could benefit surviving AI companies and their investors, but the broader economic and societal impacts remain unclear.

Open Source Is Now Geopolitical

Meta's new Llama 4 "Maverick" models reportedly rival OpenAI and Google, demonstrating fierce competition and the rising strategic importance of open-source AI. Concurrently, China's DeepSeek, in collaboration with Tsinghua University, released a model advancing self-improving AI, rapidly closing the technological gap. Open-source AI is now geopolitically strategic, leveraged by China both defensively and offensively, challenging U.S. technological dominance. Meta’s own "open-source" initiative and OpenAI's moves underscore this shift.

A study by Stanford also noted that while the U.S. remains the global leader in state-of-the-art AI, China has significantly closed the gap. The U.S. still leads in notable AI models and private investment, but China now leads in AI publications and patents and is catching up in terms of model users. The report indicates intensified competition among top AI companies, with credible rivals emerging alongside leaders like OpenAI and Google, suggesting no single entity currently holds a clear advantage in AI. This creates serious ROI challenges for heavily VC-funded U.S. AI behemoths.

Agentic AI's ROI Dilemma

Another report highlights major hurdles for the much-hyped area of Agentic AI. Enterprises struggle to justify significant operational costs and data complexities against uncertain returns. Speculative market conditions and costly promotional incentives further obscure true implementation costs.

Strategic Implications for 2025 and Beyond

Ultimately, despite temporary disruptions by political decisions and market volatility, AI remains a major geopolitical and economic battlefield. Considering the potential recession and market crash, now could be an optimal time to invest selectively in AI, provided the investments survive. The graveyard of failed dotcom companies is testament to the fact that a post-crash recovery doesn't benefit all players equally. Some eventual winners might currently be completely unknown or marginal players.

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BUZZY TOOLS

Buzzy Tech Tools To Watch & Use

Microsoft — Copilot 50th-ann update ups memory, action for personalized tasks.

Meta — Llama 4 offers advanced context, efficiency, its LM Arena are inconsistent.

Browser MCP — Connects AI apps to browsers for task automation.

ElevenLabs MCP — Claude, Cursor can now access the AI audio platform via text.

o3-mini-high — Solved a complex ‘matter phase transitions’ physics problem.

BUZZY TECH

The Latest Deep Technology & Trends To Watch

NVIDIA Brain-to-Voice AI — Converts brain signals to speech in real-time.

Two-Way BCI — Enables paralyzed patients to control hands and feel touch.

Starfish Wearable — AI-powered device tracks heart health with 90% accuracy.

Bacteria-Inspired Robot — 12-arm propulsion for non-invasive marine inspections.

AI-Powered Air Pollution Sensors — Finding enhances air quality monitoring.

CRYPTO WATCH

Crypto Market Crash — Bitcoin plummeted to a new 2025 low amid a widespread crypto market downturn, including US crypto stocks. Ethereum hit a two-year low as $1.6B of leveraged positions liquidated.

Strategy's Bitcoin Blues — Michael Saylor’s company reported $5.91B in unrealized losses on Bitcoin holdings in Q1 2025. After buying 80,715 BTC for $7.66B, total holdings remain 528,185 BTC valued over $43B amid market downturn.

Cap’s Stablecoin Surge — Franklin Templeton led an $8M seed round for Cap, a startup developing a yield-generating stablecoin and lending platform. Users can mint cUSD with USDC or USDT and earn interest, secured by restaked ETH.

SPACE_RACE

SpaceX Fram2_Polar flight conducts experiments, achieves first human X-ray

Golden Dome_Space-based interceptor for ballistic, hypersonic, nuclear threats.

Falcon 9_SpaceX boosts Starlink network with 27 satellites aces landing.

Axiom Space_Orbital data centers enhance cloud, real-time Kepler satellite data.

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