Palihapitiya Bets on AI and DeFi with a Riskier, Performance-Linked SPAC

Chamath Palihapitiya, widely recognized as the “SPAC King,” has announced a return to the special purpose acquisition company (SPAC) market with a $250 million IPO for American Exceptionalism Acquisition Corp. A. This move comes three years after he stepped away from the SPAC model following mixed results from previous ventures. The blank-check firm aims to identify and acquire a business that aligns with Palihapitiya’s expertise and focuses on sectors such as decentralized finance (DeFi), artificial intelligence (AI), and energy. The SPAC will trade on the New York Stock Exchange under the symbol AEXA, with Banco Santander SA as the lead underwriter [1].

Palihapitiya’s new SPAC is structured to enhance alignment with investor interests. Notably, the deal does not include warrants—a common incentive in earlier SPACs—which may appeal to a more cautious market. The sponsor shares, however, are tied to performance, with founder shares vesting only if the post-merger company achieves a 50% increase in share price from the $10 IPO price. The promote—30% instead of the typical 20%—means the sponsor’s reward is contingent on significant value creation [2]. AEXA Sponsor LLC has committed $1.75 million to purchase 175,000 Class A shares at $10 each in a concurrent private placement [1].

This offering follows a broader resurgence in SPAC activity. Over $16 billion has been raised across 81 SPACs this year, surpassing the total raised in both 2023 and 2024 combined, according to SPAC Research [1]. Palihapitiya’s return coincides with increased interest in SPACs linked to U.S. manufacturing and defense, sectors that have seen renewed backing from both venture capital and SPAC sponsors. His new vehicle reflects a strategic pivot toward industries aligned with domestic infrastructure and innovation under the current administration [2].

The SPAC model has faced scrutiny following a wave of underperforming deals in recent years. Out of Palihapitiya’s six completed SPACs, only one—SoFi Technologies Inc.—is currently trading above its $10 IPO price. Palihapitiya acknowledges the risks in a letter to investors, cautioning retail investors that SPACs carry substantial volatility and that they should not invest unless they can afford to lose their entire investment. He references the adage, “there can be ‘no crying in the casino’—a nod to the inherent speculative nature of SPAC investments [1].

Palihapitiya’s new SPAC is also a reflection of broader trends in the financial markets. The industry is seeing a shift toward more strategic and performance-linked structures, aiming to address investor concerns and improve long-term value creation. The SPAC is also notable for its thematic focus on AI and DeFi, which are increasingly seen as key drivers of innovation and economic resilience [2].

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[1] SPAC King Palihapitiya Returns Nearly Three Years After ... (https://www.bloomberg.com/news/articles/2025-08-18/spac-king-palihapitiya-returns-nearly-three-years-after-retreat)

[2] 'SPAC King' Chamath Palihapitiya is back with a new one (https://pitchbook.com/news/articles/spac-king-chamath-palihapitiya-back-with-american-exceptionalism)