SVB’s failure will have a ripple effect across technology ‘for years to come’
Silicon Valley Bank’s collapse could have ramifications for the technology landscape over the coming years, analysts and investors said.
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Silicon Valley Bank was the backbone of many startups and venture capital funds around the world. The effects of its collapse, the biggest banking failure since the 2008 financial crisis, is likely to be felt across the technology landscape globally over the coming years.
“With SVB in essence the Godfather of the Silicon Valley banking ecosystem for the past few decades in the tech world, we believe the negative ripple impact of this historical collapse will have a myriad of implications for the tech world going forward,” Dan Ives, analyst at Wedbush Securities, said in a note on Tuesday.
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SVB’s collapse began last week when it said it needed to raise $2.25 billion to shore up its balance sheet. Venture capital firms told their portfolio companies to withdraw money from the bank and other clients looked to get their cash before it became unobtainable. This effectively led to a bank run.
The bank had to sell assets, mainly bonds, at a massive loss.
U.S. regulators shut down SVB on Friday and took control of its deposits. Regulators then said Sunday that depositors at SVB would have access to their money, in a move aimed at stopping further contagion.
But the episode has the potential to impact the technology world in several ways, from making it harder for startups to raise funds to forcing firms to change their business model, according to investors and analysts who spoke to CNBC.
‘Last thing we needed’
SVB was critical to the growth of the technology industry, not just in the U.S. but in places like Europe and even China.
The 40-year old institution had an intimate link to the technology world offering traditional banking services as well as funding companies that were deemed too risky for traditional lenders. SVB also provided other services like credit lines and lines to startups.
When times were good, SVB thrived. But over the past year, the U.S. Federal Reserve has hiked interest rates, hurting the once high-flying technology sector. The funding environment has got harder for startups in the U.S., Europe and elsewhere.
SVB’s collapse has come at an already difficult time for startup investors.
“This whole Silicon Valley Bank thing is the last thing we needed and was completely unexpected,” Ben Harburg, managing partner of Beijing, China-based venture capital fund MSA Capital, told CNBC.
Startups have had to tighten their belt while technology giants have axed tens of thousands of workers in a bid to cut costs.
In such an environment, SVB played a key role in providing credit lines or other instruments that allowed startups to pay their employees or ride out hard times.
“Silicon Valley Bank was very paternalistic to this sector, they not only provided payroll services, loans to founders against their illiquid credit, but lines of credit as well. And a lot of these companies were having trouble already raising equity and they were counting on those lines to extend their runway, to push out the cash burn beyond the recession we all expect.” Matt Higgins, CEO of RSE Ventures, told CNBC’s “Street Signs Asia” on Tuesday.
“That evaporated overnight and there’s not another lender that’s going to be stepping in to fill those shoes.”
Paul Brody, global blockchain leader at EY, told CNBC on Monday that a crypto firm called POAP, which is run by his friend, has half of the company’s money tied up in SVB and can’t get it out. The amount at SVB is “more than payroll can cover.” Patricio Worthalter, founder of POAP, told CNBC that the company had a “substantially high amount” of its treasury in SVB and has managed to retrieve 50%. However, payroll was “never at risk” and the company has “solid credit lines to tap into” if required, the founder added.
‘Reboot’
The SVB collapse will also likely put the focus on startups to pivot to profitability and be more disciplined with their spending.
“Companies will have to reboot the way they think about their business,” Adam Singolda, CEO of Taboola, told CNBC’s “Last Call” on Monday.
Hussein Kanji, co-founder of London-based Hoxton Ventures, said that over the next three years there will be more restructurings at companies, though some are holding off.
“I’m seeing a lot of ‘kick the can down the road’ behavior which isn’t that helpful. Do the hard things and don’t delay or procrastinate unless there is very good reason to. Things don’t often get easier in the future simply because you wish for them to,” Kanji told CNBC via email.
Wedbush’s Ives said that there could also be more collapses, adding that early stage tech startups with weaker hands could be forced to sell or shut down.
“The impact from this past week will have major ripple impacts across the tech landscape and Silicon Valley for years to come in our opinion,” Ives said in a note Sunday.
—CNBC’s Rohan Goswami and Ari Levy contributed to this report.
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A new challenger in the global artificial intelligence race has entered the ring.
The Mohamed bin Zayed University of Artificial Intelligence (MBZUAI), an AI-focused research university established by the United Arab Emirates, announced on Tuesday the release of a new, low-cost reasoning model to rival OpenAI and DeepSeek.
It comes after DeepSeek, a Chinese AI lab, earlier this year shocked the world with the release of a reasoning model called R1 which it said could outperform OpenAI but with far less training costs.
At just 32 billion parameters, MBZUAI’s model, dubbed K2 Think, is much smaller than competing systems from OpenAI and DeepSeek. It was built on top of Alibaba’s open-source Qwen 2.5 model and is run and tested on hardware provided by AI chipmaker Cerebas.
For context, DeepSeek’s R1 has a total of 671 billion parameters, which is essentially another term for the variables that an AI language model learns to understand and generate language. OpenAI doesn’t disclose the parameter counts of its AI models.
K2 Think was developed in partnership with G42, the buzzy UAE-based AI firm backed by U.S. tech giant Microsoft. The researchers behind it say it delivers performance on par with the flagship reasoning models of OpenAI and DeepSeek — despite being a fraction of the size.
They cited the benchmarks AIME24, AIME25, HMMT25 and OMNI-Math-HARD, which relate to math, coding benchmark LiveCodeBenchv5 and science benchmark GPQA-Diamond.
How did they do it?
Hector Liu, director of MBZUAI’s Institute of Foundation Models, told CNBC the team behind K2 Think were able to achieve such high levels of performance by using a number of methods.
They include long chain-of-thought (CoT) supervised fine-tuning — a method of step-by-step reasoning — as well as so-called test-time scaling, which is a technique for improving performance by allocating extra computing resources during “inferencing” — or, applying learned knowledge to data it’s never seen before.
“What was special about our model is we treat it more like a system than just a model,” Liu told CNBC. “So, unlike a regular open-source model where we can just release the model, we actually deploy the model and see how we can improve the model over time.”
“If you ask me which one of the single steps is the most important, it’s very hard to say. It’s more like a system method work where all these methods combined delivered the final result,” he added.
Why does it matter?
There are two countries on the world stage that stand out as the forerunners in the AI race: the U.S. and China.
America’s tech giants and startups like OpenAI led the early momentum with so-called foundation models, which aim to fulfill a wide range of tasks by relying on vast amounts of training data. However, DeepSeek’s breakthrough with R1 earlier this year reinforced China’s position as a formidable AI player in its own right.
More recently, the UAE has sought to position itself as a global leader in AI in a bid to enhance its geopolitical influence and diversify its economy beyond crude oil dependency.
The region can point to its AI development firm G42 as an example of how it’s gaining ground in the space. However, it faces fierce competition from neighboring Saudi Arabia, which is looking to develop full-stack AI capabilities via Humain, a company launched under the Public Investment Fund in May.
Beyond that, there are also geopolitical complexities that shroud the UAE’s AI ambitions. Microsoft’s investment and partnership with G42 last year attracted a great deal of scrutiny in the U.S. related to the company’s relationship with China.
More broadly, the UAE’s AI industry still has a long way to go to reach the scale of its U.S. and Chinese counterparts. OpenAI and the Big Tech players have enjoyed a good head start with their respective foundation AI models, while Beijing has long considered AI a strategic priority.
Focus on scientific breakthroughs
While K2 Think demonstrates performance on par with OpenAI, the system’s developers say the aim is not to build a chatbot like ChatGPT. Richard Morton, managing director for MBZUAI’s Institute of Foundation Models, explains the model is intended to serve specific uses in fields like math and science.
“The fact is that the fundamental reasoning of the human brain is the cornerstone of all the thinking process,” Morton told CNBC.
“With this particular application, instead of taking 1,000, 2,000 human beings five years to think through a particular question, or go through a particular set of clinical trials or something like that, this vastly condenses that period.”
It could also expand the reach of advanced AI technologies in regions that don’t have access to the kind of capital and infrastructure U.S. firms possess.
“What we’re discovering is that you can do a lot more with less,” Morton said.
Technology
China’s Unitree plans $7 billion IPO valuation, Reuters reports, as humanoid robot race heats up
Humanoid robot from Unitree Robotics after a boxing match during the World Smart Industry Expo 2025 at Chongqing International Expo Center in Chongqing, China on September 7, 2025.
China News Service | China News Service | Getty Images
Unitree Robotics, one of China’s hottest technology startups, is planning an initial public offering that could value the company at up to 50 billion yuan ($7 billion), and help establish itself as a global leader in humanoid robots.
So-called humanoid robots are artificial intelligence-powered machines designed to resemble humans in appearance and movement, with applications in the industrial and service sectors.
Zhejiang-based Unitree has established itself as a leader in China’s humanoid robot space, and its listing plans could make it one of the first companies specializing in the technology to go public.
The company’s fresh valuation target, first reported by Reuters, citing two people with knowledge of the plans, would mark a sharp jump from its latest fundraising round reported on in June. At the time, the company had attracted major backers such as Geely, Alibaba and Tencent.
Unitree, in a post on its X account on Aug. 27, outlined its plans to IPO, saying that it was actively advancing listing preparations and was expecting to submit the application documents in the fourth quarter of the year.
It remains unclear how much Unitree is seeking to raise in the IPO. The company recently told local Chinese media that it’s been profitable since 2020 and now has revenues exceeding 1 billion Chinese yuan ($140.35 million).
Unitree did not respond to CNBC’s request for comment.
An offering of this size would be one of the largest Chinese tech listings in recent years. The mainland stock market has been gradually reviving following years of tightened regulatory scrutiny and volatility.
Unitree’s listing plan also comes as Beijing steps up efforts to support its local champions in artificial intelligence-related industries. Its founder, Wang Xingxing, was reportedly among a group of tech leaders who attended a rare meeting with Chinese President Xi Jinping earlier this year.
In 2023, China’s Ministry of Industry and Information Technology issued guidelines for humanoid robots, calling for “production at scale” by 2025.
Competition heats up
Unitree is part of a wave of Chinese humanoid robot companies, including Agibot, also known as Zhiyuan Robotics and Galbot, a Beijing-based robotics start-up backed by the Hong Kong government.
These companies have been rushing to get their robots deployed in factories across China. EV makers like BYD and Geely have already reportedly deployed some of Unitree’s humanoid robots at their production lines.
Meanwhile, Chinese humanoid robots have taken center stage in recent publicized events such as the World Robot Conference and World Humanoid Robot Games.
As these companies rush to get their robots deployed in factories across China, an IPO could help Unitree establish itself as China’s leading firm in humanoid robots, according to Lian Jye Su, chief analyst at independent analyst and consultancy firm Omdia.
“Unitree is one of the world’s leading vendors in mobile robots and it will likely be a top player in the humanoid robotics sector,” he said.
According to estimates from Omdia, a total of 15,000 units are expected to be shipped this year, with Unitree’s share second only to its domestic competitor Agibot.
Competition is also heating up internationally. The U.S. has seen its own burgeoning humanoid robot players, such as Boston Dynamics and Figure AI, emerge. However, Tesla’s Optimus appears to be leading the pack in commercial readiness, with CEO Elon Musk previously stating plans to produce about 5,000 units this year.
However, analysts have previously told CNBC that China has established an early lead in the humanoid robotics space in terms of commercial products and pricing.
A research note from Morgan Stanley last month said that the Unitree G1 was likely the most used humanoid robot globally, given its low $16,000 starting price point. Tesla’s Optimus Gen2 humanoid robot is expected to cost at least $20,000.
Meanwhile, Unitree recently unveiled a new humanoid, the Unitree R1, with a starting price of $5,900. According to Morgan Stanley, while these cheaper humanoids may not be the most advanced, they will be valuable for Unitree to collect critical data needed to train its next generation of robot models.
Still, while China may have an early lead in the commercial success of humanoid robots, analysts note that the U.S. has strengths in the broader AI robotics environment.
The U.S. has strong chipset makers like Nvidia and Intel, hyperscalers such as Google and Meta, and robotics software vendors such as Physical Intelligence and Skild AI, which give it an “equally, if not more robust” overall humanoid robot ecosystem, said Omdia analyst Su.
For example, Chinese humanoid robot makers – including Unitree Robotics – have become early adopters of Nvidia’s humanoid robot technologies. That includes Nvidia’s recently released Jetson AGX Thor platform, which enables their machines to have real-time, intelligent interactions with people.
Merrill Lynch analysts estimated in a recent research note that global humanoid robot shipments will reach 18,000 units in 2025 from 2,500 units the year prior. It also estimates a global robot population of 3 billion by 2060.
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