Venture capitalists love to talk about pivoting. Good. They're gonna have to.

• This isn't about personal politics, although there are certainly some venture frontrunners who will hope that folks memory-hole the past two years.
• It's about how the investment math may have just changed for AI — which now dominates venture investments and returns.

Driving the news: Democrats yesterday wrecked Republicans at the federal, state, and local levels.

• This includes governor offices in states with the most data centers under construction.
• In market leader Texas, Gina Hinojosa pledged to end data center-related tax breaks. Research firm SemiAnalysis suggests that her victory could lead to extended delays for up to 41% of data center capacity planned in the U.S. for 2028.
• In Georgia, Keisha Lance Bottoms campaigned on a statewide "pause" for new data center construction. In Ohio, Amy Acton said she wants a conditional moratorium.

Zoom in: AI obviously isn't going away, but long-term projections of its unrestrained growth may be.

• Venture capitalists will need to account for this new environment, particularly when it comes to valuations.
• Not only for companies that are explicitly focused on AI, but also for AI-affiliated companies in areas like energy, health care, and defense tech — which may have its own problems, particularly if Pete Hegseth gets booted.

Zoom out: OK, so maybe this is a little bit about personal politics. Or at least about political contributions.

• A lot of top venture capitalists spent big money boosting Republicans this cycle, which means they'll struggle to get face time with incoming Democrats.
• If data center pushback is really a "messaging" problem, as so many AI advocates believe, then there is an elevated risk that the VC message won't be heard.

Market reax: It's worth noting that the Nasdaq threw up on itself last night when it became likely that Hinojosa would win, but has since rebounded on the prospect of divided government gridlock.

The bottom line: The politics will change again, because they always do. But technology is moving too fast for investors to wait.

CVS Health (NYSE: CVS) today announced plans to split its health and pharmacy services businesses into two, independent public companies.

Why it's the BFD: This is the dismantling of a health empire that CVS has spent decades building, often through large acquisitions.

Zoom in: CVS Health will be a health-care services company that includes insurance giant Aetna, value-based care group Oak Street Health, pharmacy benefit manager CVS Caremark, and at-home care group Signify Health.

• CVS Pharmacy will consist of the physical retail pharmacies, mail pharmacy, MinuteClinic urgent care, and health navigation and engagement platform Health100.
• The company said it expects the split to occur by the first half of 2028.

Ballot box: Helena Foulkes, former president of CVS Pharmacy, last night was elected governor of Rhode Island.

Catch up quick: CVS rival Walgreens was broken up into five separate businesses by new owner Sycamore Partners, which then sold off the Boots pharmacy chain.

The bottom line: The era of health-care vertical integration is in the rearview, with a Democrat-controlled Congress more than happy to put its foot on the gas.

• Revolut, a British neobank, completed a secondary deal led by Glade Brook Capital Partners at a $115b valuation. Axios Pro flashback

• Fal, an SF-based inference infrastructure startup, raised $1.3b at a $16b valuation. Bessemer Venture Partners led, joined by Nvidia, Sound Ventures, and T. Rowe Price. axios.link/4jSMuxO

• Traversal, an NYC-based observability and site reliability startup, raised $120m at a $1b valuation from Kleiner Perkins, Redpoint Ventures, Khosla Ventures, and Sequoia Capital. axios.link/4eOfpj7

• EloElo, an Indian app for microdramas, raised $80m in Series C funding from Hornbill Capital and NBCUniversal. axios.link/4jRhtKG

• 42AI, an Israel-based developer of behavioral AI models for financial institutions, raised $62.5m in seed funding from firms like Infinity Group. axios.link/4kvVvgu

🚑 Thryv Therapeutics, a Canadian heart failure biotech, raised US$30m in Series B funding. InClin led, joined by Amplitude Ventures, Investissement Québec, Lumira Ventures, adMare BioInnovations, CTI Life Sciences Fund, and Alexandria Venture Investments. axios.link/4imTvps

🚑 Bit.bio, a British synthetic biology platform, raised $25m in Series D funding from M&G Investments and Abcam founder Jonathan Milner. axios.link/4BOzsbk

• Supa, a U.K. property management platform, raised £21m in seed funding. 2150 and OpenOcean led, joined by Kompas VC, Actia Capital Partners, and Heartfelt. axios.link/4jXGaVL

• LO:TECH, a London-based continuous on-chain trading startup, raised $12m in Series A funding. MMC led, joined by Faction, 13 Books Capital, and Atka. axios.link/3WJ71v6

• Brava Security, a threat detection startup, raised $15m led by Pitango and F2, per Axios Pro. axios.link/4ipIZhm

• Phaze, a Park City, Utah-based provider of remote access to human and AI workers, raised $8.75m in seed funding, per Axios Pro. A16z led, joined by Indie, NextView, Makers, and Lerer Hippeau. axios.link/4sIcka3

🚑 Osstec, a London-based maker of 3D-printed joint replacements, raised $8m. Embryo Ventures led, joined by Neovate Capital, New Wave Ventures, Oxford Technology Innovation Finance, and Empirical Ventures. axios.link/4sDU1mi

🚑 Vitroscope, a Norwegian live-tissue platform, raised $7m in seed funding. Cerberus Ventures and YZR Capital led, joined by Arcas Ventures, Golden Egg Check, and Devico Invest. axios.link/4yUMOQp

• Artiso AI, a Spanish AI startup for fashion groups, raised €3m in pre-seed funding led by Criteria Venture Tech. axios.link/3X4zsnj

• Juritas, a Stockholm-based contract intelligence startup, raised €1.4m in pre-seed funding led by Passion Capital. axios.link/47WVF9q

Source: Giphy

• One Rock Capital Partners agreed to buy a 70% stake in Kraft Heinz's (NYSE: KHC) coffee unit, including Maxwell House and Gevalia, at an enterprise value north of $650m. axios.link/4yZpDEG

• Brite, a Sole Source Capital portfolio company, acquired Xobee Networks, a Fresno, Calif.-based provider of managed IT and cybersecurity services. axios.link/4yVA2Ry

• Fort Point Capital recapitalized Gulf Pride Paving, a Gulfport, Miss.-based provider of paving, civil construction, soil stabilization, and concrete work. axios.link/4isN82I

🚑 LeanTaaS, backed by Bain Capital and Ergo Capital, bought SF-based LookDeep Health, a hospital virtual care platform. axios.link/4zmu79f

• Novacap acquired OSI Maritime Systems, a Canadian provider of navigation and tactical tech for NATO and allied navies. axios.link/48uSpSF

• PAI Partners agreed to buy British skincare brand Elemis from L'Occitane, whose backers include Blackstone and Goldman Sachs Alternatives. axios.link/4fcHocq

• Restoration Systems, a Blue Point portfolio company, acquired Wells Masonry Restoration, a New Palestine, Ind.-based provider of exterior façade repair services. axios.link/3X3XLli

• Signia Aerospace, an Arcline portfolio company, agreed to acquire Heads Up Technologies, an Addison, Texas-based provider of aircraft cabin systems and passenger experience tech, from JLL Partners. axios.link/4sCKg7W

• YMTC, a VC-backed Chinese chipmaker, has put its Shanghai IPO on hold, per Reuters. axios.link/4zuJpZQ

• CrowdStrike (Nasdaq: CRWD) agreed to acquire Fiddler AI, a Palo Alto, Calif.-based provider of software for monitoring AI agents, for $400m. Fiddler had raised nearly $100m from Capgemini Ventures, LDV Partners, LG Technology Ventures, Cisco Investments, Samsung Next Ventures, Mozilla Ventures, In-Q-Tel, Insight Partners, Lux Capital, and Lightspeed. axios.link/4kvVNE6

⚡ Energy Capital Partners agreed to sell Harvestone Low Carbon Partners, owner of three corn-based ethanol biorefineries, to The Andersons (Nasdaq: ANDE) for $915m. axios.link/47TgCSy

• Empower Brands, an Oaktree-backed unit of Spectrum Brands (NYSE: SPB), plans to launch a hostile takeover bid for Helen of Troy (Nasdaq: HELE) after two offers were rebuffed, per Bloomberg. axios.link/4AbEAnV

• Foodtastic made a hostile bid for Canadian restaurant franchisor MTY Food Group (TSX: MTY) for around C$1b, after two prior offers were rejected, per Bloomberg. axios.link/3Wm6tLE

• KeyBanc Capital Markets acquired Atlantic-Pacific Capital, an investment bank focused on private equity. axios.link/4iEJCCB

🚑 Porter, a health care IT services provider, acquired Pareto Intelligence, a Chicago-based population intelligence platform. axios.link/4A9BJvM

🚑 Rockwell Medical (Nasdaq: RMTI) agreed to acquire Vantive's hemodialysis assets. axios.link/4zlAda1

• Ballistic Ventures, a cybersecurity-focused VC firm, is seeking to raise $360m for its third flagship fund and another $130m for a follow-on vehicle, per SEC filings. axios.link/48u75BA

• I Squared Capital raised $3b for its second infrastructure credit fund. isquaredcapital.com

🚑 Yosemite, an oncology-focused VC firm led by Reed Jobs, raised $350m for its second fund. axios.link/4yZqHZc

• Sequoia Capital announced that it is closing its London office, saying it plans to keep investing in Europe but no longer requires a "local presence."

• Greg Stewart joined Falfurrias Management Partners as a partner focused on tech and business services. He previously was with Great Hill Partners. axios.link/4yW3EhW