In partnership with

Understanding the AI Infra Hype Cycle:

A few weeks ago, we talked about the Gartner Hype Cycle for enterprise AI. As companies race to claim a spot in the AI ecosystem, understanding what’s overhyped and what has real value has never been more critical. Gartner’s Hype Cycle helps organizations make informed decisions about when, where, and how to invest in emerging technologies. 

What Powers AI and How Do Data Centers Piece Everything Together: 

‘AI infrastructure’ is the ecosystem of hardware, software, and systems necessary to create, train, and deploy AI and machine learning applications. Ultimately, this backbone powers everything from fraud detection to generative AI chatbots like ChatGPT. It consists of high performing chips (GPUs, TPUs), fast storage, low-latency networks, orchestration software, and the AI-optimized data centers that house it all. 

Although these layers turn raw data into real workloads, the real transformation is happening inside the data center. These facilities require:

• High-density racks to maximize compute power

• Liquid cooling to manage the large amounts of heat generated by AI processors

• Massive power draw that makes energy efficiency and sustainability critical

AI is reshaping the design, operation, and economics of data centers. Organizations that can deliver scalable, efficient and sustainable environments will be the enablers of the AI economy.

The Hype Cycle Explained: 

Gartner’s Hype Cycle is a visual framework representing the maturity, adoption, and social application of specific technologies. It helps businesses evaluate whether they should invest or if they should hold off based on where a technology is in its life cycle:

1. Innovation Trigger - Early Buzz

2. Peak of Inflated Experiences - Overhype

3. Trough of Disillusionment - Disillusionment

4. Slope of Enlightenment - Real Adoption

5. Plateau of Productivity - Productivity

Why the Hype Cycle Matters for AI Infrastructure:

AI infrastructure is expensive, complex and rapidly evolving. Misjudging where a technology sits on the in the cycle can result in overcommitting to unproven ideas or missing out on transformative innovations. With AI at the very center of digital transformation strategies, the stakes are high: investment risk, sustainability pressure, and fierce competition. But when organizations time infrastructure decisions correctly, they can minimize risk, optimize spend, and avoid tech whiplash.

The Current State of the Hype Cycle and AI Infrastructure: 

AI infra has advanced the early buzz, but not all of its components are maturing at the same pace:

• Generative AI - GenAI is now entering the Trough of Disillusionment. Early adopters are facing challenges around governance, security, scalability, and cost. Businesses are realizing that robust infrastructure, strong data governance, and regulatory alignment are a must to build GenAI responsibly. 

• AI-Optimized Data Centers - AI specific data centers featuring high-density racks, liquid cooling, and massive power capacity are being sought after. However, due to supple chain constraints and sustainability challenges this sector is still climbing the Slope of Enlightenment.

• Composite AI -  The next wave of innovation is combining techniques like ML, NLP, and knowledge graphs. For example, self-driving cars combine computer vision, advanced sensor fusion, predictive analysis, and situation analysis to achieve autonomous navigation and decision making. Composite AI is currently at the Innovation Trigger and early Slope of Enlightenment.

Final Thoughts 

Understanding the macro patterns of the AI Hype Cycle is a powerful advantage for buyers navigating the crowded and often confusing AI infrastructure landscape. By leveraging this model, buyers can cut through the noise of overzealous marketing and inflated promises, focusing instead on technologies that are mature, reliable, and aligned with their actual business needs. This framework helps organizations assess where a technology stands in its journey from innovation to mainstream adoption, enabling them to time investments more effectively and avoid costly missteps.

For buyers, this means being able to:

• Identify which AI infrastructure solutions are truly ready for production and which are still maturing.

• Evaluate vendors and products based on proven business value rather than hype or fear of missing out.

• Align AI strategy with organizational goals, risk appetite, and readiness, ensuring that investments are both strategic and sustainable.

Co-Authored with Alexa Ortiz.

DEMi3 Summit San Francisco, Jun27

This week, we had the pleasure of attending the DEMi3 Summit in North Beach, San Francisco.  This was a unique gathering that brought together an inspiring mix of developers and policy leaders dedicated to making AI more open, democratic, and publicly aligned. 

The event was a  showcase of collaboration, featuring two tracks focused on both cutting-edge research and infrastructure as well as forward-thinking coordination and policy. We were especially proud to support Kyle Morris and the Demi team, whose ongoing partnership and support for AI INFRA have been invaluable. It was energizing to see so many brilliant minds working together to shape the future of AI, and we look forward to building on these connections in the months ahead.

// WHATS NEXT

INFRASOCIAL 
July 1 | Los Gatos  https://lu.ma/infrasocial_jul1

Join us July 1 at Hapa’s Brewing Co. in Los Gatos for INFRA SOCIAL, an evening of networking and conversations at the intersection of AI infrastructure, cloud architecture, and data innovation.

STEP SF 2025
August 20–21 | San Francisco https://lu.ma/StepSF25

Step SF returns to Silicon Valley with a global lens on innovation. Bringing together 2,000+ attendees and 150+ companies, this event spotlights AI agents, GenAI, and cross-border scaling strategies. Founders, operators, and investors from across emerging ecosystems will convene to share insight and forge new partnerships.

Bay Area Startups Collectively Secured $1.52B This Week

$1.52B went to Bay Area startups this week, bringing June month-to-date to $21.8B. $731M went to three megadeals for applied AI verticals – healthcare (Abridge AI , $300M), legal (Harvey , $300M) and customer service (Decagon, $131M).

IPO Watch: a few more tech companies have announced their intention to test the public market, but many others (more than 100 have filed for IPOs and not moved forward) are still holding many back. With the stock market hitting new highs today, plus the relatively good performance of most of the companies who have gone public in the last year, more may be motivated to try. Chart below is 2024 and 2025 tech IPOs and price as of close of business today.

Follow us on LinkedIn to stay on top of what's happening in 2025 in startup fundings, M&A and IPOs, VC fundraising plus new executive hires & investor moves.

Early Stage:

• Tacta Systems closed a $64M Series A, an advanced robotics company developing Dextrous Intelligence, enabling robots to perform delicate, variable, human-like tasks with flexibility, efficiency and autonomy.

• Mandolin closed a $40M Series A, AI teammates fill the gap between a doctor’s signature and a patient’s first dose, so that approvals that once took weeks compress into days, cash flow shows up on time, patients start treatment while the window for clinical benefit is still open.

• Snowcap Compute closed a $23M Seed, building the first commercially viable superconducting compute platform — designed to deliver dramatic gains in speed and energy efficiency for AI, quantum, and high-performance computing.

• Allspice.io closed a $15M Series A, the platform for electronics teams to collaborate and automate their workflows—powered by an AI agent for hardware design validation.

• Skyramp closed a $10M Seed, an AI-driven testing platform that acts like a personal QA engineer for your development team.

Growth Stage:

• Harvey closed a $300M Series E, serves as an intermediary between technology and lawyer, as a natural language interface to the law, making lawyers more efficient.

• Abridge AI closed a $300M Series E, our AI-powered platform was purpose-built for medical conversations, improving clinical documentation efficiencies and enabling clinicians to focus on their patients.

• Xona Space Systems closed a $92M Series B, developing an independent high-performance satellite navigation and timing system that meets the needs of intelligent systems.

• Arine closed a $30M Series C, our software platform seamlessly integrates cutting-edge AI, clinical expertise, and advanced data analytics to deliver medication-based care interventions at the population level.

• Kognitos closed a $25M Series B, automates business operations with the first neurosymbolic AI platform engineered for robust governance and tool consolidation.

Follow us on LinkedIn to stay on top of what's happening in 2025 in startup fundings, M&A and IPOs, VC fundraising plus new executive hires & investor moves.

AMD's MI355X launch at Advancing AI Day marks a pivotal moment in AI acceleration.

With 288GB HBM memory, 60% more than Nvidia's B200 and superior FP6 performance, the chip delivers up to 33% better total cost of ownership for small to mid-scale LLM inference. This positions AMD beyond mere alternative status in the AI accelerator market.

The company's comprehensive ecosystem strategy through Neocloud includes financial incentives, extended GPU rentals, and strategic partnerships that reduce adoption barriers. Major cloud providers like AWS, Meta, and Oracle are expanding AMD deployments across inference and training workloads, creating competitive pressure that benefits the entire industry.

AMD's 2026 MI400 series roadmap targets rack-scale computing, designed to compete directly on scale, flexibility, and cost efficiency. Combined with ROCm software improvements and a maturing partner ecosystem, AMD is evolving from competitive alternative to infrastructure leader, offering organizations viable options beyond traditional single-vendor ecosystems while addressing supply constraints and premium pricing challenges.

Your Feedback Matters!

Our mission is to provide an insider's view of Silicon Valley's undercurrents – insights often overlooked by mainstream sources. While many newsletters offer broad market overviews, we focus on delivering a unique, in-depth understanding of the local ecosystem. We share behind-the-scenes conversations, introduce key players we meet at events, and offer exclusive insights.

Your feedback is crucial in helping us refine our content and maintain the newsletter's value for you and your fellow readers. We welcome your suggestions on how we can improve our offering. [email protected] 

Logan Lemery
Head of Content // Team Ignite

Modernize your marketing with AdQuick

AdQuick unlocks the benefits of Out Of Home (OOH) advertising in a way no one else has. Approaching the problem with eyes to performance, created for marketers with the engineering excellence you’ve come to expect for the internet.

Marketers agree OOH is one of the best ways for building brand awareness, reaching new customers, and reinforcing your brand message. It’s just been difficult to scale. But with AdQuick, you can easily plan, deploy and measure campaigns just as easily as digital ads, making them a no-brainer to add to your team’s toolbox.

Learn more now.