One signal

AI startups’ need for servers is helping drive a shift towards funding rounds split into multiple tranches, The Information says. Founders and investors told the publication that these structures, once unusual, are becoming more common.

The split can mean investors enter at different valuations. Some investors argue that larger venture firms gain an advantage and that headline valuations can overstate how much capital was raised at the higher price. It is a useful glimpse of how the race for compute reaches beyond data centres and into deal terms.

Discuss: Do tranches sensibly match investment to an AI startup’s needs, or give the biggest investors too much leverage?

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