• The S&P 500 rose 0.55% on Tuesday as tech stocks, including Meta and Google, ticked upward.

Tariffs may be leaving a cloud over the stock market, but tech companies continue their upward climb, buoyed by investor excitement around artificial intelligence. On Tuesday, Meta’s share price rose 1.20% amid reports that Mark Zuckerberg’s social media giant planned to invest around $15 billion into the startup Scale AI.

Meta wasn’t the only tech company to receive a boost on Tuesday. Apple shares rose 0.61%, despite a lackluster performance at its annual developer conference, while Tesla rebounded 5.67% as the public spat between Elon Musk and President Donald Trump has become more muted. Overall, the S&P 500 rose 0.55%.

Despite markets remaining in the green, investors remain cautious as trade talks between the U.S. and China continued in London. Commerce Secretary Howard Lutnick told reporters on Tuesday that discussions with Chinese economic officials were going well. “We’re spending lots of time together,” he said.

AI buzz

Meta has retained its status as one of the topmost U.S. tech companies, despite high profile stumbles over the past few years. Those include its disastrous pivot to the metaverse, and its more recent scramble to keep pace in the AI arms race with competitors, including Google and OpenAI.

In its latest bid to shore up resources, Meta is building a new “superintelligence” AI research lab—a term for an AI system that would surpass the collective intelligence of humanity—that will likely be headed by the 28-year-old billionaire founder of Scale AI, Alexandr Wang. According to reports from Bloomberg and The Information, the deal to bring Wang on board would entail an investment into Scale AI totaling around $15 billion.

Though the move may not be enough for Meta to compete with other AI labs, the company’s stock still ticked up by 1.20%, bringing its monthly gain to 9.85%. Google rose by 1.29% on Tuesday.

As for Tesla, despite Tuesday’s bump, Tesla has still fallen by 5.55% over the past week. The company is planning to launch its long-anticipated self-driving taxi service in Austin by the end of the month.

Another red-hot tech stock, the stablecoin company Circle, maintained most of its massive gains from its initial public offering last week, hovering around $105, though it dropped 8.31% on the day. As Congress inches closer to passing landmark legislation that would establish regulation for stablecoins, a type of dollar-backed cryptocurrency, Circle had the largest two-day pop for an IPO that raised more than $500 million since 1980. Analysts said that Circle’s performance could encourage other fintech and crypto companies to go public, with the exchange Gemini announcing that it had confidentially filed for its IPO last week.

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Silicon Valley denizens may not think of the U.S. government as a hub for cutting-edge innovation, but the venture firm DataTribe has a 10-year bet that says otherwise. Defense tech has become one of the hottest areas in VC, but DataTribe flips the approach on its head. While companies like Palantir and Anduril develop tech to sell into governments, DataTribe works with recent government alumni to adapt their cybersecurity expertise for the private sector. The approach has paid off, with DataTribe recently closing a $41 million fund—its third. 

I spoke with DataTribe’s managing directors Leo Scott and Robert Ackerman last week to understand this strange moment for government-tech industry relations. Elon Musk and Donald Trump were escalating their social media flame war, with Trump threatening to cancel Musk’s portfolio companies’ government contracts. Meanwhile, Anduril had just announced a massive funding round and a $31 billion valuation. “Within all the chaos, there’s opportunity,” Ackerman told me. “But right now it’s a mess.” 

DataTribe’s unique approach insulates it from the other government-aligned venture operations, which probably had panicked meetings this weekend about who to align with in the Musk-Trump feud. The tech industry and the defense wings of the government have a longstanding relationship—that’s how Silicon Valley initially got bankrolled, after all, even if some tech companies in recent years have distanced themselves from such work under pressure from employees. But as companies like Meta start to cozy back up to military clients, DataTribe deviates from firms like a16z’s American Dynamism, or even the CIA-affiliated In-Q-Tel, that view the government as their customer. That approach can be risky, as Musk is learning the hard way.  

DataTribe does the opposite, advising its portfolio companies not to chase government dollars. Instead, it recognizes the amount of research and development occurring in the government, helping recent departees take those findings and apply them to the private sector. One such portfolio company, Dragos, was founded by former cybersecurity experts at the National Security Agency to work with companies to assess their operational guardrails. The startup, which DataTribe backed at the seed stage, was last valued in a 2021 funding round at $1.7 billion. 

Ackerman described DataTribe’s strategy as the “reverse In-Q-Tel,” meaning it looks for technology that already exists within the government, then builds a commercial application for it. That means it’s often working with first-time founders who may have never built products outside of the government, which is why DataTribe participates at the seed stage, preferring to write $2 million to $3 million checks and taking large stakes in its companies of around 25%, as it then works closely with them to scale up. Out of its new $41 million fund, DataTribe has already deployed around half the capital and plans to be fully invested in about a year, according to Scott. 

The recent exodus of government workers, including from Musk’s campaign of DOGE-related layoffs, hasn’t created many new opportunities for DataTribe, because many of those leaving are more policy-focused, says Ackerman. Still, the mayhem in D.C., especially around the budget, justifies DataTribe’s approach that government dollars aren’t a safe bet—but that government talent is. 

“I do feel like we were waving the flag a little bit earlier in terms of understanding the value within the U.S. government technologically,” Ackerman said. “The average cybersecurity professional deserves to have the best tools, and we just wanted to be in a position to help focus on that.”

New York goes it alone…Carta has a new report finding that the share of NYC startups with a solo founder has nearly doubled since 2015, rising to 32% in 2024. Mavericks should be cautious if they want outside capital, though—only 13% of VC-backed startups in New York had solo founders. 

Leo Schwartz
X: @leomschwartz
Email: [email protected]

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