Preface: I’m not a tariffs or geopolitical expert. My insights come from years in venture and startups. I’m not here to predict macro trends or give policy advice, but I pay close attention to how uncertainty impacts builders—the people creating new products, platforms, and companies. What I’ve seen is that the most meaningful innovation rarely comes during times of abundance. It comes when it’s needed most—when systems break, when stability vanishes, and when people are forced to build smarter, leaner, and more deliberately.
I’ll be attending this Family Office Conference in May to try and learn/find some clarityhttps://www.byheritage.com/summits/nyc-family-office-summit
Innovation by Necessity
We’re in a period of historic disruption. Economic headwinds are intensifying. Trade tensions, supply chain shifts, political gridlock, and declining trust in institutions are no longer hypothetical risks—they’re the daily reality now.
But this isn’t unprecedented. As Ray Dalio pointed out in arecent post, this type of systemic unraveling—of monetary systems, political structures, and global alliances—has occurred many times in history. These breakdowns tend to mark the beginning of new orders—new ways of thinking, working, trading, and organizing society.
I don’t support the current state of global affairs as any kind of strategic initiative—but I do believe, as always, that there’s light at the end of the tunnel. I’m choosing to stay optimistic and pragmatic, focusing on the opportunities emerging now that will thrive once the dust settles and others start to recognize their potential.
Where the Smart Money Is Going 📊
Contrary to the doomsday headlines, venture capital hasn’t dried up—it’s just recalibrated. Investors are still backing companies. But they’re looking for efficiency, urgency, and clarity. The "growth at all costs" era is over. This is the era ofproof.
https://www.cbinsights.com/reports/CB-Insights_Venture-Report-Q1-2025.pdf
According to CB Insights’Q1 2025 Venture Trends Report:
🧠1 in 5 venture dealswere AI-related
$1.8Bwas raised by just 8 early-stage AI startups (each raising $100M+)
Overall VC funding dropped 13% quarter-over-quarter, butseed-stage activity remained stable, indicating continued conviction at the earliest stages
What does this tell us? Investors are still placing bold bets—but they’re focusing on foundational, category-defining ideas. The froth is gone, but conviction hasn’t disappeared. In fact, the current moment favors sharper, more thesis-driven investing.
Sectors seeing sustained or renewed interest include:
Defense and dual-use technology
Energy, climate, and supply chain resilience
Automation in legacy industries
Venture isn’t dead—it’s just maturing (hopefully!).
Vertical AI & the Rebuilding of Real Systems
AI has captured the world’s attention—but the conversation is shifting from general-purpose applications to highly specialized tools. Companies no longer want AI that sounds smart—they want AI that works. That means real, defensible value in specific industries.
What’s emerging is a wave ofvertical AI startupsthat deeply understand their market: healthcare, logistics, construction, manufacturing, defense, and more. These aren’t broad platforms—they’re engineered for real-world complexity and built to replace or augment outdated systems.
At the same time, geopolitical fragmentation and reshoring trends are driving companies to rethink how they source, make, and move things. Fragile supply chains and adversarial trade dynamics have forced companies to prioritizeresilienceover cost alone. This creates a massive opportunity for startups building in:
Automation for domestic manufacturing
AI-native quality control and factory intelligence
Digital infrastructure for logistics and shipping
Energy grid optimization and storage
Security tools for critical systems
📌 TakeCoreWeave, for example. In 2024, they raised $1.1B to scale their cloud infrastructure offering, purpose-built for AI workloads. By early 2025, they secured a $12B deal with OpenAI—making them a key pillar in the emerging compute stack. That’s not just product-market fit—that’s market timing + mission-critical value. They also braved the markets and IPOed as well which was very much needed!
Where to Build Next 🔍
The best startups over the next decade won’t be born in pitch competitions or accelerators. They’ll be forged in the gaps—where legacy systems are breaking and urgent demand is growing.
So where should founders be looking?
Where trust in old systems has collapsed
Where deglobalization is forcing change
Where legacy infrastructure is fragile and expensive
Where workforce shortages are driving automation
Where regulators are demanding new standards for risk and compliance
Where technology can shift economics, not just interfaces
The world is moving fast. But not everything is changing at once. There are clear signals—clear pain points—where the opportunity is real and now.
Final Thought: Build Into the Friction
We are witnessing a historic reset. The old playbooks don’t work anymore. Markets, governments, and industries are all being reshaped by deeper forces—many of which are beyond our control.
But here’s what is within our control: how we build.
The most valuable companies of the next decade will be the ones born in this moment. Not because they had more resources or better luck—but because they chose to buildintothe friction instead of waiting for the fog to clear.
Uncertainty isn’t a pause button. It’s a prompt.
Big Desk Energy | Subscribe
startup insights, stories, and vibes sent to your inbox every Tuesday
mail.bigdeskenergy.com/subscribe?_bhba=a912eba6-7a35-4c1b-a9cb-9721b5c72389
SCALABLE
Helping early-stage founders launch products and grow startups, fast.
scalable.news/subscribe?_bhba=a912eba6-7a35-4c1b-a9cb-9721b5c72389
beehiiv — The newsletter platform built for growth
Access the best tools available in email, helping your newsletter scale and monetize like never before.
Stay up-to-date with AI
The Rundownis the most trusted AI newsletter in the world, with 1,000,000+ readers and exclusive interviews with AI leaders like Mark Zuckerberg, Demis Hassibis, Mustafa Suleyman, and more.
Their expert research team spends all day learning what’s new in AI and talking with industry experts, then distills the most important developments into one free email every morning.
Plus, complete the quiz after signing up and they’ll recommend the best AI tools, guides, and courses – tailored to your needs.
Share Trace Cohen's Vertical Ai Investor Newsletter
Or copy and paste this link to others:{{rp_refer_url_no_params}}
© 2026 Trace Cohen's Vertical Ai Investor Newsletter
1 Unicorn Ranch
Port Washington, New York 11050, United States