Friday charts: Cash is king again — but for a new reason

It’s been a record-breaking year in US capital markets: To name just a few, we’ve had the largest-ever IPO (SpaceX), capital raises (Google and SK Hynix), private-equity round (OpenAI), private-credit deal (Broadcom), and public bond issue (Amazon).

The Economist calls it “speedball capitalism”: Things that would have been the defining event of any other year warrant barely a day’s attention in 2026.

That is not, however, because investors have watched too many TikToks and can no longer focus. Instead, investing has sped up because there are so, so many things to invest in: rockets, data centers, power plants, robots, self-driving cars — all of a sudden, we’re overrun with opportunities to invest in real, tangible things. 

Like war dogs.

This morning, a group of prominent venture capital firms announced a $200 million investment in Warhound, a startup that will genetically engineer dogs to serve in the US military, law enforcement, and first responders.

A co-founder told Tech Crunch the dogs could be enhanced for health, longevity, speed, agility, and sense of smell. 

The funding round valued the company at $1.2 billion.

Incredible.

In another phase of the market, I’d have lumped this in with DATs, SPACs, and meme stocks — the kinds of things that financial engineers invent near the top of the market when there's too much money chasing not enough opportunity.

But that’s not the phase we’re in. 

Now, interest rates are high and the competition for capital is fierce. Fixed-income investors can choose between Treasurys at 5.3%, mortgage bonds at 7%, and CCC bonds at 18%. Equity investors can choose between Nvidia at 18x earnings, Goldman Sachs at 12x earnings, and SK Hynix at 3x earnings. Private credit investors can choose between any number of giant AI infrastructure projects to finance.

A few of them chose Warhound instead, which makes me think there might be something to it.

Either way, this is capital markets at their productive, entertaining, and inspiring best. Only a cynic could be less than amazed at the collective ambition of financing reusable rockets, data centers in space, self-driving cars, humanoid robots, and war dogs, all at the same time. 

“When a man is tired of American capital markets,” The Economist wrote, “he is surely tired of life itself.”

Investors, though? Investors might finally be getting tired.

This week, Meta said in a filing with the SEC that it may preemptively raise capital now, before the market runs out.

I’m sure companies have thought that before, but it might be the first time in the history of capital markets that they’ve said it.

Not in recent memory, at least. As recently as a few years ago, the stock market was primarily a place for companies to buy back their shares, simply because they had nothing else to do with it.

Now, there’s so much to do that we’re approaching the limits of the stock and bond markets’ ability to finance it. 

Nasdaq was down this week because investors have begun to worry they won’t have enough money to fund the tech sector's ambitions in AI.

And Berkshire Hathaway was up because it has no ambitions in AI — and because its $365 billion of cash suddenly looks like a scarce commodity.

Cash is king again.

But only because there are so many things to do with it — like getting a super dog.

Let’s check the charts.

Flowing freely:

In Q3, Meta was free cash flow negative for the first time since becoming a public company. It won’t be the last time. For 2027, management said it expects “to continue investing aggressively.”

Earnings are up:

Multiples are down. Thanks primarily to bumper earnings at semiconductor companies like Nvidia and Micron, earnings estimates for the entire S&P 500 (blue) continue to rise. Share prices (red) have failed to keep up, making the earning multiple (green) go down.  

Investors are feeling adventurous:

Venture capital has invested a record $600 billion year to date — with three months to go still!

The big spenders:

Nick Bloom estimates that just 2% of firms account for half of corporate spending on AI — which might be a thin reed for the entire market to be standing on.

The two-horse race:

Chinese models now account for nearly 70% of token consumption, per data from Liminal Capital, but US models still earn 64% of the revenue.

Revenue by lab:

Despite the success of open-source Chinese models, Anthropic and OpenAI continue to earn most of the industry’s revenue by charging much higher prices for their closed models.

ROIC needed:

Morgan Stanley estimates that to make a decent return on current investments, the AI industry will have to be earning roughly $3 trillion a year by 2030.

How it’s going:

AI revenue is growing incredibly rapidly, but might have to grow even more incredibly to hit that $3 trillion target.

The safe place:

Berkshire’s pile of $365 million of cash has made its stock the place to hide when you’re feeling worried about AI.

But what’s the fun in that?

Have a great weekend, K-9 readers.

— Byron Gilliam

_{Brought to you by:}

Tokenized money market funds extend familiar liquidity investments into a programmable format, opening new possibilities for automation and streamlined processing.

As markets continue the shift from centralized records to shared ledgers, tokenized money market funds are emerging as a bridge between traditional liquidity and digital assets.

All of finance is coming onchain and the institutional heavyweights are headed to DAS London this November 10-11.

Grab your tickets for unmatched access to the leaders bringing institutional finance onchain.