Friends,

Foley represented NEA in its lead investment in Positron AI, which announced an $875 million Series C on Thursday at a $5 billion valuation. Seven months ago the company was worth a billion. That is the price of a credible answer on the cost of running AI, and the cost question ran through the whole week, from Harvey’s raise to Wednesday’s near-certain rate increase to the datacenter backlash. Our GC lunch filled the room on Friday. Apple released the folding iPhone Duo. Here is the week.

In the Courts

◊ The AI copyright trial that was supposed to start Monday did not. Andersen v. Stability AI, set to produce the first jury verdict on whether training an image model on copyrighted work is itself infringement, slipped from Monday to next spring. The market is not waiting. Anthropic’s $1.5 billion settlement set a reference price near $3,000 per work, and studios keep signing with the very companies being sued. Price the legal outcome as a tail risk and keep shipping.

◊ Paramount, briefly. The court rules on the $1.88 billion bond question on September 24, with the ticking fee waiting behind it. Nothing moved this week, and nothing needed to. Watch the 24th.

Recent Deals

◊ Foley represented NEA as a lead investor in Positron AI’s $875 million financing. NEA co-led the round and led the follow-on with Jim Clark of Silicon Graphics and Netscape fame, and NEA’s Forest Baskett joins the board. Positron sells a cheaper way to run AI, and a valuation that went from $1 billion to $5 billion in seven months says buyers believe it.

◊ Foley advised the lender group on Dimension Energy’s $657 million distributed solar financing. Positron makes AI cheaper to run, and Dimension helps power it. The energy financing pipeline is exactly where this newsletter said the work would be.

◊ If you are catching up: last week’s edition covered Nvidia’s $12.9 billion Hugging Face acquisition, our representations in Walden Robotics’ physical AI round and Nexamp’s solar financing, and hiring season in the GC seat.

The Tape, Briefly

The Fed meets this week, and the market has made up its mind. After Friday’s hot inflation report, odds of the first rate increase since 2023 sit near nine in ten, with oil over $100 doing its part. Last week’s coin flip is now close to a formality. Four readings for dealmakers:

◊ Assume the hike, and negotiate for the ones after it. Bank of America sees three increases ahead. The question in your deal is not Wednesday. It is whether your terms survive two more.

◊ Washington floated a $5,000 dividend to every adult, and the bond market did the math. This newsletter has no politics, so here is only the arithmetic. Roughly $1.3 trillion of proposed household cash, with inflation at 3.4 percent and full employment, means rates price higher for longer, and higher for longer is the discount rate on every startup’s future cash flows. Plan your raise for the market that exists.

◊ Apple told the same inflation story from a keynote stage. The folding iPhone Duo starts at $1,999, the 18 Pro line took $100 increases that Apple blames on memory costs, and leasing arrived to soften the sticker. When the most disciplined pricer in hardware passes through component costs and finances the difference, believe the CPI print.

◊ The datacenter backlash is gaining steam, and the numbers say so. Local opposition blocked or delayed $130 billion of projects in the first quarter, as much as all of last year, 30-plus states have filed over 300 datacenter bills, and utility commissions are opening rate cases on who pays for the grid. This is not a mood. It is siting, permitting, power contracts, and community agreements, which is to say it is legal work, and the projects with the best lawyering will get built.

From My Desk

◊ What is a general counsel worth? Friday’s GC lunch took the question head on, and the full takeaways post is coming to the Substack, where subscribers will see it first. Kelly Boyd and I moderated. Janice Roberts of Benhamou, comp committee chair at Zebra and Netgear, brought the board view, Courtney Yu of Equilar the data, Matthew Zinn (ex-CLO of Matterport) the seat, and Sean Burke of Whistler Partners the recruiter’s read. First the golden nuggets: (1) compensation starts with the scope of the role, (2) the relationship with the CEO, and (3) the quality of the company, in that order, and the numbers follow. Do you believe? You have to believe, because it is all in the equity, and no benchmark can price conviction for you. And strong leaders build strong teams, which means compensation for the team matters too, because a chief who negotiates only for her own package has missed the point. The full post adds the data, why peer benchmarks beat your company’s insistence that it is a unique snowflake, and why hoping the company will take care of you is not a strategy.

◊ New on Ignite this week: Where We Are on Software M&A. Each August I read the software earnings roll-up for what it means to the deal market. The answer this year is the one I gave Law360 after Airtable. Thousands of viable software companies have stalled, some will buy AI and data to restart growth, and some will sell. Airtable was not an outlier. It was a preview.

◊ Still current, and more current after this week: what makes a great CFO, why the venture market is reorganizing rather than recovering, my Ready for Anything takeaways on going public, and California’s $366 billion venture capital boom, which the Positron round just made look conservative.

◊ Three golden nuggets from smarter people. Ilya Strebulaev published new career data on Tuesday. The top 1 percent of venture capitalists, about 120 people, have earned 56.7 percent of all venture profits, roughly $680 billion. Mohamed El-Erian has been arguing markets over-price the hike, partly because AI-driven productivity is repairing the supply side. If he is right, the innovation economy is the disinflation story. And Nicolas Sauvage of TDK Ventures coined a phrase I cannot stop using. Vibe manufacturing, AI compressing hardware’s design-build-test loop the way vibe coding compressed software. Whoever iterates on atoms as fast as code owns the next decade, which is the Hard Things conversation on the 28th.

The Team

◊ Welcome, Stephen Olson. Stephen joined our Houston office from Gibson Dunn this week, a leading private equity adviser who deepens our private capital and energy bench, arriving the same week we announced a $657 million energy financing. Good timing. Last week Brad Drake and Kyle Pine joined in Chicago and Boston, taking the firm past 20 lateral partners this year. The pipeline of people is active too.

New in the GC Seat

The seat kept turning. If you or a friend just took one, reply and we will note it here.

◊ Big pharma passes a torch. Bristol Myers Squibb named Cari Gallman general counsel and chief policy officer, succeeding Sandra Leung, one of the longest-tenured legal chiefs in the Fortune 500. Departments that promote from within after a long reign tend to be departments that were run well.

◊ Familiar names, new chairs. Match Group handed the legal function to Sean Edgett, who was Twitter’s general counsel through its $44 billion sale. Agilent named Bret DiMarco chief legal officer, and MBX Biosciences appointed Jeff Held this week, three decades of life sciences work behind him.

◊ And the seat is a springboard. MetLife Stadium announced that Mark Stefanacci, its chief operating officer and general counsel, will take over as president and chief executive. Every GC reading this suspected the path existed. Now there is proof.

Legal Tech, Briefly

◊ Harvey raised $550 million on Wednesday at a $15.5 billion valuation, and a disclosure is in order. Harvey is a Foley vendor. We have a view because we live in it. Our lawyers work with AI daily, and we hired a chief information officer this summer to run buy-or-build like the strategic decision it is. The race that matters is not between the vendors. It is between the firms that adopt seriously and the firms that wait, and we intend to keep running at the front. As for the vendors, Anthropic keeps pointing Claude at legal work, Harvey now trains its own models, and the market just voted $550 million on how that goes.

◊ The veteran’s question underneath all of it. How long can anyone print queries at exponential losses? I hear it at every dinner this month, and there are two credible answers. Make queries cheaper to serve, which is Positron’s entire business. Or consolidate until pricing power arrives. My money says both happen at once.

On the Calendar

Thank you to everyone who filled Friday’s GC lunch in Palo Alto. The takeaways post is on its way.

September

◊ CHAI Legal Summit · Thursday, September 17 · Foley Boston, 111 Huntington Avenue. The Coalition for Health AI returns to our Boston office for its second annual Legal Summit, in partnership with Foley, a full day where health law meets AI. In-person seats cap at 150 and this is the final call. The agenda and registration are on CHAI’s events page.

◊ Women’s Leadership Meeting · Thursday, September 17 · Foley SF office. A 75-person gathering of women leaders in tech and law.

◊ Buy, Sell, or Wait: M&A Decisions CFOs Are Making Now · Tuesday, September 22 · Palo Alto. I moderate, with Rob Bartlett of Jefferies, Jason Babcoke of Sumeru, and Harish Belur of Riverwood, on valuation gaps, timing a process, and what buyers now demand in diligence. Off the record, no slides, and a fresh Wednesday rate decision to argue about. Request a seat.

◊ Third Annual Private Fund Managers Conference · Thursday, September 24 · Foley Boston, 4:00 to 7:30 PM. Allocators, fund managers, and family offices. Mark Hourihan of Adams Street Partners and Rob Nagle of HighVista Strategies on how LPs pick emerging managers, plus a former co-head of the SEC’s Private Funds Unit. No cost. Register here. Worth the flight if you manage other people’s money.

◊ Hard Things · Monday, September 28 · Palo Alto. Physical AI is the hottest early-stage story of 2026, and this is the room Vitaly Golomb of Mavka Capital and I built for it. No slides, no keynotes, just an unfiltered conversation about where companies break when they move from bits to atoms. Chris Yeh, co-author of Blitzscaling, is the special guest. Request an invitation.

October · Tech Week season

◊ SF Tech Week: Sidebar Summit · week of October 5 · San Francisco. Tech Week’s founder and investor hub. Details to come.

◊ Ready for Anything: IPOs, SPACs and Capital Market Shifts · Tuesday, October 6 · our SF office. Our Tech Week evening with the CFO Executive Forum. I join Raymond Yue of Avalara, who took Sumo Logic public, and Jeff Meyer of Protiviti, with Ellie Yashiro of SVB moderating. IPO timing, the SPAC reset, dual-track exits. Request a seat.

◊ Founders n Funders · Thursday, October 8 · San Francisco. Tech Week’s founder and investor mixer.

◊ CTA Advanced Manufacturing Event · Tuesday, October 13 · Foley SF office. Builders and buyers in advanced manufacturing, hosted in our office.

◊ LP/GP Event with Jersey Finance · Wednesday, October 14 · Foley SF office. Fund managers and the investors who back them, co-hosted with Jersey Finance.

◊ One Way Summit · October 28 and 29 · San Francisco. A thousand immigrant founders and investors, on the fact the organizers love to cite, that immigrants built more than half of America’s unicorns. We sponsor, and I join Thursday’s panel with Immad Akhund of Mercury and Nicolas Dessaigne of Y Combinator. Anna Makanju of OpenAI headlines. Register; space is limited.

◊ First Rays AI Portfolio Day · Wednesday, October 28 · University Club of Palo Alto. Company presentations from 4 to 6, cocktails from 6 to 8. We sponsor this one too, which makes the 28th a doubleheader. Registration is by approval.

Looking ahead

◊ Ski + Tech Summit · January 27 to 29 · Grand Summit Hotel, Park City. Growth Elevated’s three days of founders, investors, and operators at the base of Canyons, with roundtables in the lodge and chairlifts in between. Foley sponsors. The deals that sign in spring often start on a lift in January. Register here.

Closing Argument

◊ A well-drafted deal does not flinch on Wednesday. That is the point of drafting. If your agreement was built on the old curve, Monday is a good day to reread the financing conditions and the outside date.

◊ Positron is the margin lesson of the season. It went from $1 billion to $5 billion in seven months selling a cheaper way to run AI, not a smarter model. Value is moving down the stack toward whoever solves cost, in silicon, in power, and in the contracts that deliver both.

◊ The rooms are open. The CHAI summit and women leaders gather Thursday, I take the moderator’s chair on the 22nd, and physical AI convenes on the 28th with Tech Week right behind. If you are raising, selling, or stepping into a bigger seat, my inbox is open, and connecting people is still the best part of this job.

— Louis

Standard disclosures: opinions my own, not my firm’s. Not legal advice. Attorney advertising. Prior results do not guarantee a similar outcome.