AI's Foundational Economic Shift: Entrée Capital Commits $300M to Deep-Tech

Entrée Capital has unveiled a $300 million fund to back early-stage AI, deep-tech, and crypto projects, bringing its total assets under management to $1.5 billion according to the press release. The firm, which focuses on pre-seed, seed, and Series A investments across Israel, the UK, Europe, and the U.S., is doubling down on vertical AI, quantum computing, and decentralized infrastructure. Founders in these sectors are described as "outliers" tackling industries lagging in digital transformation, such as manufacturing and logistics, where AI's impact could be "violent and complete" as research shows. The firm's partners emphasize a long-term vision: "AI is a foundational transformation of the global economy," said Eran Bielski, adding that Entrée has been investing in AI for seven years.

The firm's strategic focus aligns with broader market trends. C3.ai, a leader in enterprise AI applications, recently expanded its partnership with Microsoft to integrate its platform with Azure Copilot, Fabric, and AI Foundry. This collaboration allows customers to unify data, model operations, and reasoning within a single system on the Microsoft Cloud, a move C3.ai CEO Stephen Ehikian called "making enterprise AI practical, trusted, and scalable". The partnership, deepened over a decade of collaboration, includes access to Microsoft's global sales force and infrastructure, accelerating C3.ai's market penetration.

C3.ai's recent performance underscores the growing demand for enterprise AI solutions. The company reported a 21% year-over-year revenue increase in Q1 FY2025, reaching $87.2 million, and projects $370–$395 million in annual revenue for fiscal 2025 according to market analysis. Strategic alliances with Capgemini and hyperscalers like Google Cloud and AWS are pivotal, enabling large-scale AI deployments in sectors such as energy and defense. However, analysts caution that the AI market remains immature, with risks tied to converting pilot projects into sustainable revenue and navigating regulatory challenges.

The broader tech landscape reflects both optimism and caution. Nutanix, another enterprise cloud provider, reported mixed results in its Q1 earnings, matching estimates but missing revenue targets. While C3.ai's stock surged 35% in a week, Nutanix underperformed the S&P 500, highlighting divergent trajectories in the sector as market data indicates.

Entrée Capital's new fund and C3.ai's strategic moves signal a shift in venture capital and corporate strategy toward AI-driven innovation. As Entrée's Avi Eyal noted, "We are entering a new era where physics, compute, software, and national-security innovation converge". For C3.ai, the integration of Agentic AI platforms with Microsoft's tools aims to simplify AI deployment, enabling enterprises to "reason directly on trusted data" without duplication.