Eclipse Ventures Closes $1.3B for 'Physical AI' — And Plans to BUILD Companies

SPOTTED: Liwen Behl's Palo Alto-based firm isn't just writing checks — they're incubating startups IN-HOUSE. After backing Redwood Materials, Wayve, and Bedrock Robotics, Eclipse is now playing Dr. Frankenstein with actual company creation. "We're definitely working on a couple of really cool ideas," Behl teased. The firm wants startups that work across enterprises, creating interconnected ecosystems. Scale is the name of the game, darlings. [TechCrunch]

Hermeus Hits Unicorn Status at Mach 5 Speed

Defense startup Hermeus just raised $350 million at a $1 billion valuation to build what they call the "fastest unmanned aircraft." Led by Khosla Ventures with Founders Fund, In-Q-Tel, and RTX Ventures piling in — plus $150M in debt to keep that cap table tidy. They're building full-scale aircraft annually (CEO AJ Piplica: "There's nowhere in the world where companies are building new full-scale aircraft on an annual basis"). Nearly 300 employees and counting. The defense tech gold rush is real, sweethearts. [TechCrunch2]

Firmus: The 'Southgate' of AI Data Centers Hits $5.5B

Singapore-based Firmus — backed by Nvidia and now Coatue — just raised $505 million at a $5.5 billion post-money valuation. They're using Nvidia's Vera Rubin platform (the next-gen after Blackwell) for these AI data centers. Let that sink in: a data center company is now worth more than most Fortune 500s. The AI infrastructure arms race is officially bonkers. [TechCrunch3]

Mercor Hit with FIVE Lawsuits in ONE Week Over Data Breach

The $10 billion AI training startup — yes, the one that uses gig workers to train AI for Meta — just got slammed with five contractor lawsuits alleging data privacy violations. Hackers stole Slack data and videos of conversations between contractors and AI systems. Meta paused its work with Mercor after the breach. Even better? One suit names Berrie AI (the open-source LiteLLM creators) AND Delve Technologies — the "automated compliance" firm that certified Berrie's compliance. The irony is giving me LIFE. [Business Insider]

ARR: The 'Fake Accounting Number' Silicon Valley Can't Quit

Andreessen Horowitz-backed Cluely's co-founder just admitted to lying about his company's ARR to a reporter — and then called the metric "a fake accounting number developed by fake accounting people." This after Anthropic, Glean, and Cursor (the "fastest-growing startup of all time") have all leaned heavily on ARR reporting. With enough leeway in how to measure it, startups can "massage the figures" to their heart's content. The calculation was "changing 20% week to week." Messy, messy, messy. [LA Times]

GitLab Founder Sued Over $400M Buyback Power Grab

Co-founder Sytse Sijbrandij allegedly pushed GitLab into a $400 million buyback program to regain corporate control "without spending a penny of his own." The repurchases would push his voting power back above 50% after a selling spree that earned him $64 million. The lawsuit accuses him of using buybacks to delay the sunset of his supervoting Class B shares. Nothing says "I'm still the main character" like engineering your own ownership boost. [Bloomberg Law]

Family Offices Skip the VC Middlemen — Go Direct to Cap Table

According to BNY Wealth research, 83% of family offices say AI is a top strategic priority, and more than half already have AI exposure. Now they're skipping VC funds entirely to get directly onto startup cap tables. "Companies are staying private longer, and there are fewer IPOs now than we've seen historically," says Mitch Stein of Arena Private Wealth. The AI boom has created an investment frenzy that's rewriting the LP-GP relationship playbook. [TechCrunch4]

Credit Funds Pull Back on Software — Opening for Opportunistic Lenders

Direct lending funds are stepping back from software after AI fears sent public software stocks tumbling in February. Now "special-situations and opportunistic credit funds" are stepping in to "drive a harder bargain." Software borrowers used to lock in ARR loans at 525-550 basis points over benchmark — those days are over. The weak are being devoured, darlings. [PitchBook]

Liwen Behl, Eclipse Ventures: On Building at Scale

"Scale is so important, and if you can put it together in a way where companies partner early on to build scale, to build proof points, and it just then enables them to go after the next set of demand." The future of physical AI is all about portfolio companies partnering with each other — and each other's partners. [TechCrunch]

Mitch Stein, Arena Private Wealth: On the Direct Investment Boom

"Companies are staying private longer, and there are fewer IPOs now than we've seen historically. The family offices who are allocating [directly into AI startups] are right on." When the old playbook stops working, write a new one. [TechCrunch4]

Sundar Pichai, Google CEO: On Deploying Capital

"You know SpaceX, Anthropic and so on so, I think now with the AI shift, there are more opportunities on which we can deploy capital in a good way and so we are doing that." With Alphabet's investment in Anthropic now exceeding $3 billion (reportedly 14% stake) and their SpaceX bet poised to return $100B+, Pichai sees AI as opening the floodgates. [CNBC]

The AI infrastructure build-out is moving at hypersonic speed — literally. Between Eclipse incubating physical AI companies, Hermeus building autonomous aircraft, and Firmus constructing the data center backbone, we're witnessing the industrialization of the AI revolution.

Meanwhile, traditional VC intermediaries are being disintermediated (how's that for irony?) as family offices go direct. And those "fake accounting" ARR numbers? The whistleblowers are coming from inside the house.

Today's theme: Scale, scale, and more scale. Whether you're building hypersonic drones or $5.5B data centers, the winners are the ones who can partner, platform, and proliferate. Everyone else is just buying time.