Daily Brief : May 31: Inference, Fusion, and the AI Power Race

HEADLINE

Groq raises $650M from already-cashed-out investors while Thea Energy and a London VC firm reorient their entire strategies around powering the AI infrastructure race.

THE BIG PICTURE

Five stories in 48 hours trace the same underlying current: AI inference economics are now the primary force reshaping capital allocation across Deep Tech, energy, venture strategy, and even space launch. Every dollar in today's brief is either feeding compute demand, funding the power that feed it, or responding to a market suddenly reorganized by inference-driven infrastructure needs. This is not hype, it is capital following physics and electricity bills.

WHAT HAPPENED

Groq is raising up to $650 million from existing investors in what amounts to a reconstitution rather than a traditional follow-on. The AI chipmaker had already distributed $7.6 billion to shareholders in February 2026, roughly $64 per share, after signing a $20 billion licensing deal with Nvidia in December 2025. Now the same investors are being asked to bet again, with backstopping from Disruptive and Infinitum. The reconstituted company, led by CEO Adam Winter and CFO Matt Eng, is pivoting away from silicon design and toward what it calls an AI inference neocloud, a developer platform built on its own Language Processing Unit hardware and existing GroqCloud customer base. The timing is strained: DeepSeek cut its V4 Pro pricing by 75% this week, compressing the revenue-per-token economics inference cloud providers depend on. Whether Groq can rebuild engineering leadership and maintain a cost edge against both Nvidia and model providers is now the bet.

Thea Energy, based in Kearny, New Jersey, closed an oversubscribed $100 million Series B led by Thomas Tull's US Innovative Technology Fund, with participation from General Innovation Capital Partners and Linse Capital. Total private investment now stands at $130 million. The capital funds magnet manufacturing infrastructure, including a second New Jersey facility, and supports the siting and construction of Eos, a large-scale integrated stellarator designed for steady-state fusion at power plant scale. The company plans to select an Eos site later this year and double its headcount. Stellarators have historically lagged tokamaks in funding, but Thea's architecture shifts complexity from precision mechanical fabrication to software-defined controls, a breakthrough the U.S. Department of Energy has already certified in the company's power plant preconceptual design. CEO Brian Berzin noted the firm is in discussions with more than a dozen power offtakers, hyperscalers, and utility partners, a signal that AI data center power demand may finally be the demand driver fusion has needed.

Transition Ventures, a London-based early-stage firm, closed €128 million ($150 million) Fund II, bringing AUM to over €257 million ($300 million). The close marks a sharp thesis reframe: away from climate-first carbon removal investing and toward what co-founder David Helgason calls 'physical AI', backing companies rebuilding real-world systems at the intersection of artificial intelligence and industrial infrastructure. The pivot has a specific origin. When ocean-based carbon removal company Running Tide, in which Transition held a stake, collapsed in June 2024 after failing to generate demand in the voluntary carbon market, the firm recalibrated. Climate technology investment peaked at $128 billion in 2022 but is forecast to reach only $89 billion in 2026, with an increasing share flowing to firms supporting AI infrastructure rather than emissions reduction. Portfolio companies now include Olix Computing, a photonics startup replacing electricity with light for AI calculations, which has approached $1 billion valuation, and Applied Atomics, founded by ex-SpaceX engineers to build small modular reactors for colocation data centers.

WATCHING

Groq's ability to hold its inference cloud customer base as token prices compress and Nvidia's inference efficiency improves. Thea Energy's site selection announcement for Eos later this year will signal how serious offtakers are about custom fusion power for data centers.