In today’s episode, Andreas Munk Holm talks with Jonatan Luther-Bergquist from Inflection.xyz, who shares his journey in framing crypto fundamentally as a compute technology and formulating their thesis on sovereign compute back in 2023. Jonatan explains that while the early work in crypto helped lay the groundwork for disruptive technology, he saw a bigger picture emerging - a need for Europe and other regions to improve their digital independence.
In this conversation, Jonatan dives into the three pillars of his sovereign compute thesis: scaling compute capabilities, building resilient systems, and ensuring access to data flows. He illustrates his points with real-world examples, from photonics and semiconductor technologies to communications that can make all the difference in modern defense scenarios. By drawing parallels between evolving technology and the pressing geopolitical challenges, like those seen in Ukraine, Jonatan makes a compelling case for why investing in robust, forward-thinking compute solutions is essential for a secure and prosperous future.
Jonatan puts out a weekly digest of interesting people, companies and ideas they interact with. Check that out here. We also recommend his latest article, freshly published this morning, which explores Europe's current challenges and opportunities in Defense Tech.
Watch it here or add it to your episodes on Apple or Spotify 🎧 chapters for easy navigation available on the Spotify/Apple episode.
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✍️ Show notes
1. Shifting Global Dynamics and Multipolarity
The conversation opens by noting that the world has shifted from a unipolar structure, one nation dominated, to a multipolar landscape where power is more evenly spread among global players like China and Russia. This change has major implications for international security and economic stability, raising concerns about how well Europe can compete in this new environment.
The speakers emphasize that this multipolarity can be dangerous if nations aren’t prepared. They discuss how Europe, in particular, has not yet caught up with other players, stressing the need for new strategic tools and innovations to regain a competitive edge. The dialogue sets the stage for exploring how technology, especially advanced compute capabilities, might offer a way forward in this shifting global balance.
2. The Central Role of Compute in Sovereignty
A central theme of the discussion is that advanced computing isn’t just about faster processors; it has become an important lever for national and economic sovereignty.
They break down this idea into three core aspects: scaling up compute power, building resilience into compute systems, and ensuring the smooth flow of data across various platforms. In this view, robust compute is the foundation upon which a nation’s security and economic strength can be built. Without it, we will be left behind..
3. Transition from Crypto to Sovereign Compute
Jonatan’s journey from focusing on crypto investments to a broader commitment to sovereign compute forms a key part of the dialogue. Initially, the fund’s energy was directed toward crypto because it promised to revolutionize digital systems and create outsized returns through early investments. However, as the sector evolved, many crypto projects proved unsustainable, leading to a natural pivot in focus.
This shift wasn’t just about moving away from crypto’s token-driven models; it was a realignment toward investing in technologies with long-term societal impact. Jonatan explains that the same innovative spirit that drove early crypto investments now fuels a broader vision—one that centers on building enduring, resilient tech ecosystems to secure national and economic sovereignty in a rapidly changing world.
4. Investment Philosophy and Inflection Points
The discussion moves into how the fund’s investment philosophy is built around the concept of inflection points, moments when a small innovation triggers a major shift in society or industry. The idea is that a tiny technological breakthrough can eventually lead to significant, transformative change if nurtured correctly. This approach requires looking beyond immediate returns to find deep, underlying quality in ideas and the founders behind them.
Drawing inspiration from works like Zen and the Art of Motorcycle Maintenance, Jonatan contrasts dynamic quality (the immediate, visible appeal) with static quality (the deeper, lasting value). By focusing on static quality, the fund aims to support ventures that might not make a flashy entrance but have the potential to reshape industries over time. This thoughtful, long-term view helps the fund identify investments built to endure rather than just capture a moment.
5. Real-World Examples and Technological Innovations
Throughout the conversation, real-world examples illustrate how innovative technologies can serve as inflection points. For instance, the discussion touches on advancements in semiconductors and photonics to increase power and the potential of unconventional computing methods like using biological systems (e.g., brain tissue) for processing tasks. These examples help ground abstract ideas in tangible technological progress.
The speakers also discuss practical applications of these innovations in areas such as defense, where reliable communication and advanced compute capabilities have immediate life-and-death implications. Using examples from the battlefield in Ukraine, like Starlink-enabled communications and even fiber optic drones, they underscore the importance of integrating cutting-edge compute technologies into systems that support national security and operational resilience.
6. European Defense and Sovereignty Challenges
Europe has lagged behind in developing its advanced semiconductor manufacturing and other critical technologies, leaving it vulnerable in a multipolar world. Jonatan addresses that Europe’s fragmented defense ecosystem further complicates the challenge.
In response to these issues, initiatives like the European Defense Tech Hub have been established to foster collaboration and innovation among European startups and defense technology companies. The goal is to pool talent and resources to develop deep tech solutions to fortify Europe’s sovereignty. This approach reflects a broader strategy to leverage advanced compute for commercial success and to strengthen national security and resilience.
7. Evolving Investor Perspectives
Finally, the discussion touches on how the shift from a crypto-focused strategy to a sovereign compute thesis has influenced investor conversations. Some limited partners (LPs) initially saw the fund purely as a crypto venture, but as the focus broadened, the fund had to explain the rationale behind investing in a wider range of transformative technologies. This evolution challenges investors to think beyond neat, pre-defined categories.
Jonatan emphasizes that a deeper understanding of technology and its long-term impact is more important than sticking to outdated labels. By avoiding the narrow confines of crypto investing, the fund can capture opportunities that span various sectors, reinforcing the belief that sustainable, high-impact investments often lie at the intersection of multiple technologies. This approach is seen as a way to secure superior returns and contribute meaningfully to national and global resilience.
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