State of Markets

• Private unicorns exceed $5T aggregate value; top decile pulling away.
  • Revenue growth “exploded upward” for top quartile/decile in 2025.
• Power law intensifying: tech separating from all other sectors.
• Largest earnings winners capture biggest valuation premiums.
• Infrastructure fully saturated: 7–8yr old TPUs running at 100% capacity.
  • Signals sustained, not speculative, AI compute demand.
• Jevons’ Paradox playing out: cheaper tokens → more usage, not less.
  • Especially for indirectly monetized apps.
• Profitability imperative: AI investments must generate substantial returns.

David George, a16z — January 22, 2026 · 2026-01-22 · Read on a16z.com