Good morning. The market is still waiting for AI frontier developers to go public. Imagine what the prospect for an IPO looks like if your company isn’t OpenAI or Anthropic.

As The Morning Download reported last week, U.S. venture dealmaking hit $515.8 billion through the third quarter of 2026, but exits remain stalled. The PitchBook NVCA Venture Monitor shows that just 18 companies went public in the third quarter, leaving 992 active unicorns and a backlog of IPOs with no clear path to liquidity.

Please use the alternative exit. The M&A door is open.

• Amazon is in talks to buy Decart, a San Francisco AI startup whose software lets developers move between different AI chips, in a deal that could be worth around $7 billion, The Wall Street Journal reports. The acquisition would bolster Amazon’s push to compete with Nvidia through its own Trainium chips, which Decart got early access to in 2025. Decart also develops world models. The company says its Oasis 3 model “generates realistic, controllable multi-view simulation environments where robots can learn, act and improve…starting with autonomous vehicles.” It’s easy to imagine how Amazon, which operates in the physical world in a way that most tech giants don’t, could put that technology to use.

• The FT reports that Nvidia is in early talks to deepen its investment in U.S. open-weight model developer Reflection AI. Options include an “acqui-hire” or a chips-and-compute deal, adding to the $800 million Nvidia has already invested.

• Quantum-computing company IonQ struck an all-stock deal to buy Elisity in a transaction that values the cybersecurity firm at up to $1.3 billion. IonQ has been on an acquisition spree, according to the WSJ. Earlier this year it struck an $1.8 billion takeover of chip maker SkyWater Technology.

The M&A door is likely to remain open. As PitchBook noted, the backlog of companies that need to or should have gone public by now could account for more than two full years of IPOs.

• Despite AI companies’ promises of dramatic efficiency gains, a growing stack of surveys finds something else. “So far, the data says no,” Apollo chief economist Torsten Slok wrote last week in a review of San Francisco Fed data on whether AI is boosting productivity, adding “the productivity payoff from AI remains a forecast rather than an observation.” One possible reason, according to a New York Times DealBook research roundup, is workers spend much of the time AI saves checking and fixing its output. Experts say the real bottleneck is now how much humans can review, not how much AI can produce, especially for complex tasks requiring expert judgment.

• Microsoft President Brad Smith in a conversation with the BBC called for global safety rules on AI, including a legal obligation to tell a “victim” if their system is breached by a rogue AI agent. “Right now, your washing machine is subject to more safety rules than AI,” he said.

• Anthropic recounted more rogue activity by its AI agents in a blog post last week that included submitting a false homicide tip to a Philadelphia police website. The false-report incident happened in July. Anthropic didn’t realize it until September, says the WSJ.

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Follow Isabelle Bousquette on LinkedIn, Instagram, X, and TikTok for more behind the scenes on her tech and AI coverage, and lately, her contributions to the WSJ Leadership Institute’s new Executive Resilience series, where she’s profiling America’s top execs about their fitness and wellness habits.

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