The Peel with Turner Novak The State of AI: Rise of Reasoning, Surge in Chinese Open Source, Sovereign AI , How to Invest in AI Today | Nathan Benaich, Air Street Capital
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Jan 22, 2026 
In this discussion, Nathan Benaich, founder of Air Street Capital and author of the influential State of AI report, delves into groundbreaking trends shaping the AI landscape. He discusses the shift toward reasoning and tool calling in AI models, and the significant rise of Chinese open-source projects. The conversation also touches on the reality of AI monetization and the emergence of sovereign AI strategies driven by geopolitical motives. Benaich reflects on whether we are in an AI bubble and shares insights on AI investments and opportunities in Europe’s defense sector.
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Core Models Became The Interface
- The core model became the interface for many products, flipping earlier dynamics where wrappers monetized models.
- As models improved, vendors began capturing value directly through model-led SaaS offerings.
Fundraising Requires Relentless Outreach
- When fundraising, ask everyone for intros and use public signals (likes, company filings) to find potential LPs.
- Expect long timelines, many small checks, and to build access via referrals and brute force.
Raising Fund I Was Like Pinball With Eyes Closed
- Nathan compared fundraising to 'playing pinball with my eyes closed' when raising Fund I.
- He closed multiple tranches over two years, navigated COVID, and grew Fund I from under $10M to about $26.5M.