Kanyi Maqubela

Today, we're excited to launch AI Coverage (insurance for when your AI messes up). Insurance was built for risks that have existed for decades. AI is creating a new category very quickly.

I think we’re entering a “concentration era”. 1/ LPs are concentrating capital into a handful of mega-funds. In Q1 2026, the top 5 VC firms captured 73.1% of all LP commitments (vs 12 funds captured 75% of LP dollars in 2025). 2/ Those funds are concentrating capital into consensus “category winners” like OpenAI, Anthropic, etc (75% of VC dollars invested in 5 companies). Valuation becomes secondary when the fear is missing the first trillion-dollar AI company. 3/ And those companies are concentrating top talent (top AI labs pay $1M+ comp packages; best researchers cluster in a few orgs). The optionality gap between working at OpenAI vs. anywhere else in the market is wide enough to redirect entire cohorts of researchers and operators. What’s driving all of this? I think it’s a specific collision: the post-ZIRP recalibration met the AI FOMO cycle at exactly the wrong moment. After 2021 collapsed (valuations, deal counts, LP commitments) investors concluded that selectivity is the mature response. Then AI created a narrative so compelling that “selectivity” became functionally indistinguishable from concentrating into the same five names everyone else is concentrating into. Caution, when everyone exercises it the same way, produces its own kind of distortion The self-reinforcing part is worth noting. Mega-funds need larger ownership percentages to move the needle on their returns, so they push valuations up on the consensus names, which crowds out smaller allocators, which makes emerging managers less competitive for the same deals (luckily they play a different game), which gives LPs less reason to back them, which sends more capital upward. The loop is closed and it’s tightening. The harder question is whether this is an era or an equilibrium. “Concentration era” implies it eventually breaks. But I’m not sure the end condition is obvious. My read is it doesn’t meaningfully shift until one of two things happens: the consensus companies disappoint visibly enough at scale to reset LP psychology, or a wave of DPI from more distributed strategies reopens appetite at the edges of the market. Neither feels imminent. Until then, the barbell compresses further, and the middle of the market stays structurally undercapitalized - not because no one wants to fund it, but because the incentives at every level are quietly pointing somewhere else.

Space will define the future. The 21st century so far has been about getting to space regularly. The next chapter, is about coming back.