Nathan Benaich is the founder of Air Street Capital and author of the State of AI report. On its eighth year, the report is a year-long effort on the biggest things happening in AI, across research, industry, politics, and safety.

This episode covers the biggest takeaways from the latest report, like the rise in reasoning, the surge in China’s open source models, where AI is working in practice, the rise of sovereign AI, where he thinks value will actually accrue over the long-term, if we’re in an AI bubble, and how he’s investing in AI today at Air Street.

Thanks to Nico at Adjacent and Dan at Michigan for helping brainstorm topics for Nathan.

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Timestamps:

(3:39) State of AI 2025

(6:22) Takeaway #1: Reasoning & tool calling

(13:01) Takeaway #2: Rise of Chinese open source

(15:25) Open vs closed source models

(26:46) Takeaway #3: AI revenue is real

(27:51) Takeaway #4: Sovereign AI

(36:44) Are we in an AI bubble?

(59:23) Starting Air Street Capital

(1:05:18) Raising Fund 1

(1:16:20) Air Street portfolio strategy

(1:25:15) When and who Nathan decides to invest

(1:35:04) How important are AI benchmarks?

(1:39:31) When to train your own models

(1:45:56) Rise of European defense tech

(2:01:43) Nathan’s personal AI stack

(2:07:32) Is niching down too risky?

(2:16:12) Nadal vs Federer

Referenced

State of AI Report: https://www.stateof.ai

The Thinking Game Documentary: https://www.youtube.com/watch?v=d95J8yzvjbQ

V7: https://www.v7labs.com

Follow NathanTwitter: https://x.com/nathanbenaichLinkedIn: https://www.linkedin.com/in/nathanbenaich

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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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