Is automation overr-AI-ted?
May 2, 2026
Kaley Ubellacker
Happy Wednesday! If you’re new here, welcome to Necessary Nuggets, your one-stop pre-seed shop. We deliver updates from Necessary Ventures and helpful tidbits on our little corner of the world. Every edition is also on our blog.
What's Happenings at Necessary Ventures:
Happy Thursday! If you’re new here, welcome to Necessary Nuggets, your one-stop pre-seed shop. We deliver updates from Necessary Ventures and helpful tidbits on our little corner of the world. Every edition is also on our blog.
Good Reads 📖
For the rushed reader …
Box CEO Aaron Levie sparked debate this week by arguing that many tech CEOs are experiencing AI psychosis, i.e. overestimating what AI can automate.
Seed rounds keep getting bigger, but graduating to Series A is getting much harder.
Boston Metal, a climate and industrial materials startup producing steel with lower emissions, just raised $75 million to expand beyond its original thesis into critical minerals like niobium, tantalum, chromium, and vanadium.
For the less rushed reader …
There's no AI in team
Organizational automation might need more manual effort. Box CEO Aaron Levie sparked debate this week by arguing that many tech CEOs are experiencing AI psychosis, i.e. overestimating what AI can automate. Levie argued this is happening because CEOs are too far removed from the messy, manual work where most operational complexity lives. AI psychosis is just one piece of a broader trend across tech: we’re seeing record investment in AI and rising revenues, while companies are undergoing mass layoffs, citing AI as justification despite limited evidence that productivity gains are materializing at scale. Research suggests that AI is improving workflows, but measurable productivity gains remain inconsistent. Current agents still require heavy oversight in many real-world tasks. The real psychosis may be that AI is shifting how work gets done faster than organizations can adapt. Question for the crowd: is the AI psychosis claim ~unprompted~?
To suc-seed or not to suc-seed, that is the question. Seed rounds keep getting bigger, but graduating to Series A is getting much harder. New Crunchbase data shows the median U.S. seed round hit roughly $3 million in 2025, triple 2018 levels, with $8 million to $10 million seed rounds becoming increasingly common in the AI era. However, bigger checks haven’t made fundraising easier. Startups are now taking more than two years on average to reach Series A, and far fewer are making it there at all. Only 24% of companies that raised over a $1 million seed in 2023 have gone on to raise again, with 2024 cohorts tracking even lower so far. The result is a sharper seed-stage divide, where founders are raising more capital earlier, but investors are demanding stronger traction before backing the next round. As far as most can seed, the stage is becoming a bigger bet with a narrower path forward.
Going round and round
Forging the path ahead
One climate tech company is ironing out a new strategy. Boston Metal, a climate and industrial materials startup producing steel with lower emissions, just raised $75 million to expand beyond its original thesis into critical minerals like niobium, tantalum, chromium, and vanadium. These materials are essential for aerospace, advanced manufacturing, and defense supply chains. The company, which previously demonstrated its technology at pilot scale in Massachusetts by producing a ton of metal, is now positioning itself in a faster-moving and more commercially viable segment of the metals market. CEO Tadeu Carneiro describes the shift as a way to generate near-term revenue from higher-value metals while continuing to fund long-term steel decarbonization efforts. The move reflects a broader climate-tech funding reality: venture-backed industrial deep-tech companies are widening their commercial surface area to reach scale and justify continued capital intensity in a tighter funding and policy environment. In climate tech, it’s a matter of mining the gap between climate goals and commercial reality.
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$20.0M
18
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
EYES ON THE CHECK MIX
Looking at pre-seed SAFEs from Q1 2025 through Q1 2026, the majority of checks are greater than $100k. For raises $500k or more, at least about 60% of checks were greater than $100k, and that share increases to over 85% for rounds over $2.5 million.
climatetech
Recheck - Solar focus.
Recheck raised $2 million from Jetstream, MCJ, Overture Ventures, and ReGen Ventures. Recheck is building a compliance platform for residential solar to help installers identify trustworthy sales professionals.
climatetech
Shatterdome Energy - One stop energy shop.
Shatterdome Energy raised $3.5 million led by Crucible Capital. Shatterdome is creating a platform that aggregates electricity demand and helps operators and consumers navigate volatile markets.
climatetech
Amphiform - More than a fueling.
Amphiform raised $5.5 million led by General Catalyst and Main Object. Amphiform is developing nano-catalyst energy materials for use in fuel cells with 30x higher power density.
JOBORTUNITIES
| VP of Finance | - Copper:
Rethinking the induction stove and making kitchen electrification more accessible than ever. Picture a fossil-free future, without sacrificing aesthetics.
| Full Stack Software Engineer | - OneImaging:
Envisioning the future of transportation beyond cars and into the realm of personal electric vehicles. Its first product, P1, is the ultimate tool for city navigation.
Outro🚪
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Thanks for reading, and see you next week!
