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2 days ago

January 8, 2026

As our Crystal Ball series continues, it’s time to drill down into specific sectors.

Term Sheet readers, generally speaking, are an optimistic bunch. But there’s a lot of concern about whether we’re prepared to meet growing cybersecurity risks, with one reader predicting that even Fortune 500 CEOs will be in the crosshairs as high-stakes breaches materialize.

AI, of course, is at the center of these escalating cybersecurity risks, and at the changes that are happening in industries like robotics and healthcare. But some industries, like fintech and crypto, have created their own waves of transformation and possibility.

Without further ado (since you all had quite a lot to say) here’s what Term Sheet readers see ahead across the business landscape.

Note: Answers have been edited for clarity and brevity.

The cybersecurity stakes hit an all-time high

Cyberwar is no longer a future threat – it’s the present reality, with nation-states like China and Russia pursuing coordinated, long-term strategies that align with their geopolitical goals. —Snehal Antani, CEO and cofounder, Horizon3.ai

Trust becomes an engineering requirement, not a marketing message. Black-box AI will hit a wall in regulated industries. “Mostly correct” is not good enough when wrong answers carry real consequences. —Joel Hron, Thomson Reuters CTO

In 2026, AI browsers will move fully into an ask-and-act model, changing how people interact with the web. This convenience introduces new security risks. —Etay Maor, vice president, threat intelligence, Cato Networks

In 2026, we’ll see the first major enterprise breach caused by an AI agent behaving in unexpected ways. As autonomous systems become more deeply embedded in operations, emergent behavior will create a new class of cyber risk. —Aaron Jacobson, partner, NEA

By the end of 2026, we will see at least three Fortune 500 CEOs lose their roles explicitly due to AI system failures that their organizations cannot explain, reproduce or defend post-incident. Unlike past outages tied to infra or human error, these failures will stem from opaque AI decision paths. —Sameer Agarwal, cofounder and CTO, Deductive AI

Fintech and crypto at a crossroads

In 2026, stablecoins will just be part of your next app update on your phone. The next major app to be powered by stablecoins is one you’re already using. —Itai Turbahn, CEO and cofounder, Dynamic

Crypto credit cards will bridge the gap between traditional and digital finance in 2026. This transition will position exchanges to be comprehensive financial hubs that could compete with traditional banks and fintechs, rather than just a digital asset platform. —Matthew Goldman, founder, Totavi

Banks will lose more mass affluent customers to fintechs in 2026 than ever before. It used to be that fintechs served the customers Banks didn’t want. The less affluent. The young. Now fintechs have grown up and so have their customers. —Rex Salisbury, founder and general partner, Cambrian

Stablecoins have proven blockchain’s first killer app beyond store of value, regulation is clarifying, and institutions are finally entering the space – setting up 2026 and 2027 as some of the strongest blockchain venture vintages yet. The irony? Most LPs will sit this out, distracted by Bitcoin’s volatility theatrics and the AI gold rush. By the time the noise clears, the best funds will have been raised and committed. —Aaron Miller, head of global venture capital, CF Private Equity

As C.S. Lewis wrote, “There are far, far better things ahead than any we leave behind.” For financial services, the year ahead will prove it. —Sarah Biller, cofounder, Fintech Sandbox

The future of healthcare and its many offshoots

AI will discover at least one groundbreaking pharmaceutical that will start Phase I clinical trials. —Kanyi Maqubela, managing partner, Kindred Ventures:

The American consumer is more diverse than ever, and we are aging – by 2030 Americans over 65 will outnumber those under 18 for the first time in U.S. history. In 2026 we will see more investor activity into these areas, such as menopause, longevity medicine, elder care, and more. —Erin Harkless Moore, managing director of investments, Pivotal Ventures

In 2026, rising healthcare costs and continued strain on the nation’s public health infrastructure will act as a powerful catalyst across the industry. Employers, insurers, health systems and providers will all feel the pressure, setting off a ripple effect that is likely to accelerate dealmaking. —Amanda Zablocki, partner, co-leader of national healthcare team, Sheppard Mullin

2026 will be the year AI feels clinically real. With tools like OpenEvidence already adopted by nearly half of U.S. physicians, healthcare is moving faster than software. AI “colleagues” aka digital nurses, doctors, and copilots will eliminate non-clinical work and personalize care at scale. The next healthcare revolution won’t come from hospitals or insurers, it’ll come from AI workflows physicians already trust. —Latif Peracha, general partner, M13

In 2026, the next wave of healthcare transformation will happen at home. As reimbursement pressures mount, providers will increasingly turn to home-based care models that pair automation with intelligent, agentic AI workflows. —Irem Rami, Partner, Norwest

Demographics don’t lie: the caregiver-to-patient ratio will continue collapsing. Leading systems will begin preparing for the 2030 reality by investing in models that extend human touch without requiring more humans. Expect more deliberate reliance on recovery support partners, proactive monitoring, and simplified patient pathways. —Kyle Cooksey, CEO, Deacon Health

The next big consumer-health category isn’t new or exotic. It’s fiber. Gut health is going mainstream, GLP-1s are reshaping eating habits, and 90 percent of adults still don’t get enough daily fiber. The brands that approach fiber with science-forward messaging, innovation, and real consumer education to build daily habits will win this underserved market. —Lisa Wu, partner, Norwest

Defense and robotics

2026 will see the return of the Valley of Death to defense tech as the law of large numbers forces growing companies to seek larger and larger contracts in the context of a slow-growing defense budget. —Peter Wilczynski, CPO, Vantor

Dual‑use deep tech continues its shift from niche to mainstream. For many years, defense was a difficult category for venture capital. That’s changing fast as governments recognize these firms are essential to sovereignty and resilience—global military expenditures are growing at their highest rates since the Cold War. We expect dual‑use companies to become some of the most attractive growth stories in 2026. —Nic Brathwaite, founding managing partner, Celesta Capital

Defense tech investing will continue to gain momentum globally. The continued conflicts in Ukraine and Gaza have convinced the EU to invest almost a trillion dollars to rearm themselves and ensure a sovereign defense posture. —Brad Harrison, managing partner, Scout

In 2026, aerospace and defense investing is primed to accelerate further with more investors entering the sector and deal structures broadening across dual-use and mission-critical technology. The full force of that upswing is highly dependent on U.S. defense contracts rolling again. —Anita Antenucci, founder and managing partner, 3Wire

AI starts to hit the physical world: robots begin to move out of the lab and ship the first production-ready, end-to-end systems into biopharma labs, manufacturing lines, and logistics warehouses. Not prototypes. Not pilots. Revenue-generating deployments that deliver ROI. —Talia Goldberg, partner, Bessemer Venture Partners

Robotics reaches escape velocity, and the real boom hits in 2027. 2026 marks the rapid emergence of a unified robotics market. The true mainstream adoption wave — warehouses, micro-factories, home services—hits in 2027 as platforms stabilize. —Anders Ranum, partner, Sapphire Ventures

Silicon Valley is shifting its attention back to hardware as demand for compute and energy accelerates. Chips, energy systems and critical physical infrastructure are reemerging as the engines of the next wave of progress. Robotics is set to become one of the most important innovation arenas as we move toward 2026. —Luke Pappas, partner, NEA

We think 2026 will be the year where we start to see deployments of this new generation of AI-driven robotic systems in industrial (manufacturing and logistics) settings and service industries such as hospitality and healthcare. —Emily Zhao, principal, Salesforce Ventures

See you tomorrow,

Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Joey Abrams curated the deals section of today’s newsletter. Subscribe here.

VENTURE CAPITAL

– Soley Therapeutics, a South San Francisco, Calif.-based drug discovery and development company, raised $200 million in Series C funding. Surveyor Capital led the round and was joined by HRTG Partners, RWN Management, and existing investors.

– Corsera Health, a Boston, Mass.-based cardiovascular health prediction and prevention platform, raised $80 million in Series A funding. Forbion and Population Health Partners led the round and were joined by others.

– Mediar Therapeutics, a Boston, Mass.-based developer of therapies designed to stop fibrosis, raised $76 million in Series B funding. ICG Life Sciences and Amplitude Ventures led the round.

– Blackbird.AI, a New York City-based developer of an AI model designed to identify narrative threats to companies, raised $28 million in funding from Ten Eleven Ventures, Dorilton Ventures, and others.

– Luminate, a Galway, Ireland-based at-home cancer treatment company, raised $21 million in Series A funding. ARTIS Ventures and Lachy Groom led the round and were joined by Western Alliance Life Sciences and existing investors 8VC, Y Combinator, Atlantic Bridge, and others.

– Autonomous Technologies Group, a New York City-based developer of AI agents designed to serve as financial advisors, raised $15 million in pre-seed funding from Y Combinator, Collaborative Group, Fusion Fund, and others.

– Biographica, a London, U.K.-based company using AI to decode crop genetics, raised £7 million ($9.4 million) in seed funding. Faber VC led the round and was joined by SuperSeed, Cardumen Capital, The Helm, EQT Foundation, Sie Ventures, and existing investors.

– AgileRL, a London, U.K.-based developer of AI training, tuning, and deployment company, raised $7.5 million in funding. Fusion Fund led the round and was joined by Flying Fish, Octopus Ventures, Entrepreneur First, and Counterview Capital.

– Oasys, a New York City-based developer of an AI-powered operating system for behavioral health, raised $4.6 million in funding from Pathlight Ventures, Twine Ventures, Better Ventures, and 1984 Ventures.

PRIVATE EQUITY

– Arxis, a portfolio company of Arcline Investment Management, acquired Micro-Tronics, a Tempe, Ariz.-based producer of components for aerospace and defense applications. Financial terms were not disclosed.

– Atar Capital acquired DataMaster Online, a Saint-Grégoire, France-based printing solutions company. Financial terms were not disclosed.

– ATL Partners acquired SkyMark Companies, a Kansas City, Mo.-based manufacturer of aircraft fueling trucks and hydrant dispensers, and Rampmaster, a Coatesville, Pa.-based manufacturer of aircraft refueling solutions. Financial terms were not disclosed.

– AxioAero Group, a portfolio company of CORE Industrial Partners, acquired Airway Aerospace, a Doral, Fla.-based airplane repair company. Financial terms were not disclosed.

– Gemspring Capital acquired TRG, a Cleveland, Ohio-based provider of enterprise mobility and technology lifecycle management solutions. Financial terms were not disclosed.

– Gryphon Investors announced a majority recapitalization of Fortreum, a Lansdowne, Va.-based cybersecurity firm. Financial terms were not disclosed.

– Kelvin Group, backed by Southfield Capital, acquired PermaCold Engineering, a Portland, Ore.-based ammonia and carbon dioxide refrigeration system company. Financial terms were not disclosed.

– PestCo Holdings, a portfolio company of Thompson Street Capital Partners, acquired Bio-Tech Pest Control, a Spring, Texas-based pest control company. Financial terms were not disclosed.

– Proven Optics, a portfolio company of Silversmith Capital Partners, acquired brightfin, a Centennial, Colo.-based developer of Service Now Technology Expense Management and digital workplace solutions. Financial terms were not disclosed.

– PureStar, backed by Cornell Capital, acquired Emerald Textiles, a San Diego, Calif.-based health care linen services provider. Financial terms were not disclosed.

– TA Associates acquired a majority stake in OneSource Virtual, a Dallas, Texas-based provider of HR payments services for the Workday ecosystem. Financial terms were not disclosed.

– The Blackhawk Group, backed by New State Capital, acquired Silver Sky Aviation, a Wasilla, Ak.-based aircraft maintenance company. Financial terms were not disclosed.

EXITS

– A. O. Smith acquired Leonard Valve, a Cranston, R.I.-based water temperature control valve company, from Bessemer Investors. Financial terms were not disclosed.

– Service Express, a portfolio company of Warburg Pincus, acquired Park Place Technologies, a Cleveland, Ohio-based IT infrastructure services company, from GTCR and Charlesbank. Financial terms were not disclosed.

IPOS

– Aktis Oncology, a Boston, Mass.-based biotech company focused on solid tumors, now plans to raise up to $318.6 million in an offering of 17.7 million shares priced between $16 and $18 on the Nasdaq. The company posted $6 million in revenue for the year ended Sept. 30. MPM BioImpact, Vida Ventures, EcoR1 Capital, and Blue Owl Capital Holdings back the company.

FUNDS + FUNDS OF FUNDS

– Warburg Pincus, a New York City-based private equity firm, raised $3 billion for its third fund focused on financial services companies.

– Lux Capital, a New York City and Menlo Park, Calif.-based venture capital firm, raised $1.5 billion for its ninth fund focused on emerging science and technology companies.

PEOPLE

– Savory Fund, a Lehi, Utah-based private equity firm, promoted Shauna K. Smith to managing director and named Clay Dover as CEO. Formerly, Dover was CEO of Velvet Taco.

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Business

Trump calls for one-year cap on credit card rates at 10%

Published

4 hours ago

January 10, 2026

Jace Porter

President Donald Trump on Friday called for a one-year cap on credit card interest rates at 10%, effective Jan. 20, without specifying details.

“Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!” he wrote on social media.

It’s not clear whether credit card companies will respond to his call, or what actions he might take to force any change.

The post comes as the Trump administration intensifies efforts to demonstrate to voters that the president is addressing concerns about costs and prices that have emerged as a central issue in the November midterm elections.

During the 2024 presidential campaign, Trump pledged to seek limits on the interest credit card companies can charge.

Hours before his message on Friday, Senator Bernie Sanders, a Vermont independent, said on X: “Trump promised to cap credit card interest rates at 10% and stop Wall Street from getting away with murder. Instead, he deregulated big banks charging up to 30% interest on credit cards.”

In a letter last year to Sanders and Senator Josh Hawley, a Missouri Republican, a group of banking trade groups painted a dire outcome for consumers if the government ever capped interest rates on credit cards at 10%, as the senators had proposed.

“Many consumers who currently rely on credit cards would be forced to turn elsewhere for short-term financing needs, including pawn shops, auto title lenders or worse — such as loan sharks, unregulated online lenders and the black market,” the group wrote.

The Bank Policy Institute said in a report last year that “while the proposed cap is a well-intentioned effort to reduce the high debt burden some households are facing, it would harm consumers’ access to card credit.” The group also said such a move could force card issuers to reduce cardholder benefits, including lucrative rewards tied to purchases.

Responding to Trump’s post on Friday, Hawley said on X: “Fantastic idea. Can’t wait to vote for this.”

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Business

Asian households still save as much as half their wealth in cash. Fintech platforms like Syfe want to change that

Published

5 hours ago

January 9, 2026

Jace Porter

Growing up in India, Dhruv Arora’s mother gave him one key piece of financial advice: Put his money in the bank.

But Arora, now the founder of Singapore-based fintech platform Syfe, quickly realized that following his mother’s advice meant his money “did absolutely nothing.”

“We have quite a heavy culture of saving,” Arora says, citing Asia’s often unstable economic and policy history. But inflation and low interest rates end up eroding the value of household savings. “Over time, the $100 you put in the bank doesn’t become $101, but effectively $98” due to the effects of inflation.

Asian households sometimes keep as much as 50% of their net worth in cash, rather than in investments or assets. In contrast, in developed markets like the U.S. and Europe, that figure is closer to 15%.

But that conservative attitude in Asia is starting to change. Asians are getting wealthier, pushing them to explore different investment options. Strong stock market performance is also driving a new wave of retail investors across the Asia-Pacific.

“Asian households are slowly dipping their toes into stock markets,” HSBC economists wrote in a Jan. 9 report, though noted that “overall equity investment remains quite low.” The bank predicts that a steady shift from low-yield cash to higher-yield investments will mean “more money will continue to rotate into equity markets over the next few years,” reducing a reliance on foreign investors.

A slew of fintech apps have emerged in recent years to tap a growing interest in investing and wealth management among Asian users. These alternative finance platforms, such as Syfe, Stashaway and Endowus, often offer a range of investment options, ranging from cash management to managed portfolios and options trading. The challenge, Arora says, is how to “bridge the gap between holding money and growing wealth,” and “give more people the confidence to put their savings to work.”

Arora began his career as an investment banker for UBS in Hong Kong in 2008, soon after the Global Financial Crisis. Despite Asia’s relatively quick recovery, Arora noticed that the region’s professionals were building wealth yet didn’t know how to manage it. “These were smart people like doctors, lawyers and consultants, who were doing well professionally, but just did not know what to do with their money,” he says.

He launched Syfe in 2019, just a few months before another global crisis: The COVID-19 pandemic. Yet the pandemic ended up being an opportunity for fintech platforms like Syfe. “It acted as a catalyst for a shift in investor behavior,” Arora explained, as people suddenly had the time to engage with financial markets.

In the U.S., for example, people stuck at home began to get involved in stock trading through platforms like Robinhood. Fueled by social media, these retail investors began to heavily trade in so-called meme stocks like Gamestop and AMC.

Syfe has since expanded from its home market of Singapore to new Asia-Pacific economies like Australia and Hong Kong. The platform continues to grow both its userbase and company revenue, and the company claimed it reached profitability in Q4 2025. It’s now a “self-sustaining organization,” Arora says.

Syfe closed an $80 million Series C funding round last year, and is backed by major investors like NYC-based Valar Ventures and UK-based investment firm Unbound.

The platform’s users generated $2 billion worth of returns while saving $80 million in fees last year, according to the company.

Currently, Arora wants to deepen Syfe’s presence in its existing markets. Last year, the platform began to roll out bespoke offerings for its users, like private credit for accredited investors looking to diversify their portfolios on Syfe. Syfe will launch options trading in 2026.

Arora notes that many of Syfe’s users, over time, have grown more comfortable with taking larger investment risks, moving from putting their money in Syfe-managed portfolios, to more actively trading on brokerages and income portfolios.

Yet he eventually wants to bring Syfe to new markets in North Asia and the Middle East, which boast sizable populations of what Arora terms the “mass affluent,” a population with significant investable assets and higher-than-average incomes, though still not in the high-net-worth category.

“This demographic has historically been ‘stuck in the middle’: too large for basic retail banking, yet often underserved by traditional private banks,” he explains.

This story was originally featured on Fortune.com

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Business

Lawmakers and victims criticize new limits on Grok’s AI image as ‘insulting’ and ‘not effective’

Published

6 hours ago

January 9, 2026

Jace Porter

Elon Musk’s xAI has restricted its AI chatbot Grok’s image generation capabilities to paying subscribers only, following widespread condemnation over its use to create non-consensual sexualized images of real women and children.

“Image generation and editing are currently limited to paying subscribers,” Grok announced via X on Friday. The restriction means the vast majority of users can no longer access the feature. Paying, verified subscribers with credit card details on file can still do so, but theoretically they can be identified more easily if the function is misused.

However, experts, regulators, and victims say that the new restrictions aren’t a solution to the now widespread problem.

“The argument that providing user details and payment methods will help identify perpetrators also isn’t convincing, given how easy it is to provide false info and use temporary payment methods,” Henry Ajder, a UK-based deepfakes expert, told Fortune. “The logic here is also reactive: it is supposed to help identify offenders after content has been generated, but it doesn’t represent any alignment or meaningful limitations to the model itself.”

The UK government has called the move “insulting” to victims, in remarks reported by the BBC. The UK’s prime minister’s spokesperson told reporters on Friday that the change “simply turns an AI feature that allows the creation of unlawful images into a premium service.

“It is time for X to grip this issue; if another media company had billboards in town centers showing unlawful images, it would act immediately to take them down or face public backlash,” they said.

A representative for X said they were “looking into” the new restrictions. xAI responded with the automated message: “Legacy Media Lies.”

Over the past week real women have been targeted at scale with users manipulating photos to remove clothing, place subjects in bikinis, or position them in sexually explicit scenarios without their consent. Some victims reported feeling violated and disturbed by the trend, with many saying their reports to X went unanswered and images remained live on the platform.

Researchers said the scale at which Grok was producing and sharing images was unprecedented as, unlike other AI bots, Grok essentially has a built-in distribution system in the X platform.

One researcher, whose analysis was published by Bloomberg, estimated that X has become the most prolific site for deepfakes over the last week. Genevieve Oh, a social media and deepfake researcher who conducted a 24-hour analysis of images the @Grok account posted to X, found that the chatbot was producing roughly 6,700 sexually suggestive or nudifying images per hour. By comparison, the five other leading websites for sexualized deepfakes averaged 79 new AI undressing images hourly during the same period. Oh’s research also found that sexualized content dominated Grok’s output, accounting for 85% of all images the chatbot generated.

Ashley St. Clair, a conservative commentator and mother of one of Musk’s children, was among those affected by the images. St. Clair told Fortune that users were turning images on her X profile into explicit AI-generated photos of her, including some she said depicted her as a minor. After speaking out against the images and raising concerns about deepfakes on minors, St Clair also said X took away her verified, paying subscribers status without notifying her or refunding her for the $8 per month fee.

“Restricting it to the paid-only user shows that they’re going to double down on this, placing an undue burden on the victims to report to law enforcement and law enforcement to use their resources to track these people down,” Ashley St Clair said of the recent restrictions. “It’s also a money grab.”

St Clair told Fortune that many of the accounts targeting her were already verified users: “It’s not effective at all,” she said. “This is just in anticipation of more law enforcement inquiries regarding Grok image generation.”

Regulatory pressure

The move to limit Grok’s capabilities comes amid mounting pressure from regulators worldwide. In the U.K., Prime Minister Keir Starmer has indicated he is open to banning the platform entirely, describing the content as “disgraceful” and “disgusting.” Regulators in India, Malaysia, and France have also launched investigations or probes.

The European Commission on Thursday ordered X to preserve all internal documents and data related to Grok, stepping up its investigation into the platform’s content moderation practices after describing the spread of nonconsensual sexually explicit deepfakes as “illegal,” “appalling,” and “disgusting.”

Experts say the new restrictions may not satisfy regulators’ concerns: “This approach is a blunt instrument that doesn’t address the root of the problem with Grok’s alignment and likely won’t cut it with regulators,” Ajder said. “Limiting functionality to paying users will not stop the generation of this content; a month’s subscription is not a robust solution.”

In the U.S., the situation is also likely to test existing laws, like Section 230 of the Communications Decency Act, which shields online providers from liability for content created by users. U.S. Senators Ron Wyden, Edward J. Markey, and Ben Ray Luján have issued a statement urging Apple and Google to “immediately remove the X and Grok apps from their app stores” following Grok’s alleged use for generating “nonconsensual sexualized images of women and children at scale.” The lawmakers called the images “disturbing and likely illegal,” and said the apps should remain unavailable until Musk addresses the concerns.

The Council on American-Islamic Relations (CAIR) has also called for Grok to be blocked from generating “sexually explicit images of children and women, including prominent Muslim women.”

Riana Pfefferkorn of Stanford’s Institute for Human-Centered Artificial Intelligence previously told Fortune that liability surrounding AI-generated images is murky. “We have this situation where for the first time, it is the platform itself that is at scale generating non-consensual pornography of adults and minors alike,” she said. “From a liability perspective as well as a PR perspective, the CSAM laws pose the biggest potential liability risk here.”

Musk has previously stated that “anyone using Grok to make illegal content will suffer the same consequences as if they upload illegal content.” However, it remains unclear how accounts will be held accountable.

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