Playing The Future in 2025 & Beyond
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To our Galaxy Interactive community,
What a whirlwind year 2024 has been—and 2025 isn’t slowing down! Pivotal elections have reshaped the U.S. and global political landscape, while a continuous barrage of headline-making technological breakthroughs defined a year of both uncertainty and progress. Despite political volatility affecting capital markets, the broader appetite for innovation and digital transformation has only grown stronger. From advanced AI and spatial computing to breakthroughs in quantum computing, blockchain protocols, decentralized applications, and the emergence of AI agents, 2024 delivered an unprecedented wave of applied ideas redefining our digital and physical lives. Change like this can be unnerving, and there’s certainly cause for concern, but now, more than ever, we believe that these advances in technology will do so much more than merely drive progress in new products and markets; they’ll amplify human potential, enabling individuals and communities to achieve more, create more, and connect more than ever before.
For Galaxy Interactive, 2024 served as a validating year for our core thesis: the convergence of our digital and physical lives will profoundly reshape how we live, work and play. While we anticipated a major shift and have long been aware that we’re now on the exponential end of the curve, the pace of these developments over the last few years surprised even us (and, I’d argue, the world) and prompted some key strategic adjustments. After initially balancing content and technology in our first few funds, we’ve recognized the need to lean even deeper into technology, a change now reflected in our latest fund’s infrastructure-centric portfolio construction and the exceptional team we’ve assembled to lead us through this next chapter. To be clear, we’re very pleased with the progress our gaming portfolio has made — in both traditional gaming and the evolving Web3 space — but we’re far more excited to see the myriad ways in which the technology companies we’ve backed are now expanding beyond games into other industries, enhancing our capacity to create, collaborate, and thrive in ever more immersive environments.
Our original thesis, dating back to 2018, is that gaming is the tip of the spear with respect to the development of the interactive technology stack. That is, the technologies that will enable the convergence of our digital and physical lives will first be built to meet the wants and needs of gamers.
NVIDIA, the leading AI systems provider, began by developing graphics technology for video games. Those specialized processors, initially created to render lifelike virtual gaming worlds, have become essential for training large-scale neural networks through massively parallel computation. GPUs, once primarily built for gaming, are now synonymous with AI, supercharging innovation across industries. One of many examples of how tech built for games is now transforming finance, healthcare, logistics, and beyond.
What does this mean for how we’ve been investing over the past six years and expect to operate going forward?
Our thesis boils down to five key points:
1. A “Once in a Generation” Opportunity
We find ourselves on the frontier of a seismic shift—one that will extend well beyond typical tech cycles. AI, blockchain, spatial computing, and chip-level innovations are intersecting to create entirely new markets and business models. Whether in finance, logistics, entertainment, or healthcare, these infrastructure breakthroughs promise to reshape virtually every sector of the economy and will expand the reach of human ingenuity, opening new possibilities for collaboration, problem-solving, and creative expression.
2. Escalating Demand for Compute, Energy, and Decentralization
AI models, complex physically-correct real-time graphics, neural rendering, and an exponential explosion of data will continue to push existing infrastructure to its limits. Low-power chip technologies, edge computing, new sources of clean and safe energy, and blockchain protocols for distributed compute, data security, authentication, and identity—among many other areas—will be critical to this next wave of technological transformation. This rise in compute needs follows the market demands to tackle bigger challenges, run more complex simulations, and deliver interactive experiences at scale.
3. The Rapid Maturation of AI, Spatial Computing, and “Agentic Tech”
We’ve long recognized that AI-driven services and AR/VR/MR platforms are not just for gaming. They are transforming healthcare, education, manufacturing, defense, and more. Emerging from this space is a new category: "Agentic Tech" (recently coined, I believe, by my friend Zoe Weinberg at Ex Ante Ventures, and sure to stick). These technologies and business models prioritize human agency in an AI-centric world by placing control, privacy, and autonomy in the hands of end users. Combined with Physical AI (the integration of physically correct world models), these innovations are core to our thesis regarding the convergence of our digital and physical lives—and unlock unprecedented opportunities for scale and impact.
4. The Impact on How We Live, Work, and Play
The true significance of these converging technologies goes beyond productivity gains and new business models; it fundamentally reshapes our daily lives and the pursuit of well-being. As AI increasingly handles repetitive tasks, we expect to see a surge in time dedicated to creative, leisure, and wellness-oriented activities. Entertainment experiences will become more immersive and social, driven by generative AI and spatial computing that blur the lines between physical and virtual worlds. At the same time, innovation in healthcare and wellness apps will personalize treatment options, encourage proactive mental and physical health practices, and foster new forms of community-based support. These shifts, in turn, will fuel demand for platforms that empower individuals not just to consume media, but to co-create, co-experience, and actively participate in richer digital ecosystems. By placing human aspirations—whether they’re about play, expression, or self-improvement—at the center of technological progress, we believe these transformative forces will uplift quality of life while unlocking entirely new realms of possibility.
5. Our Unique Position in the Ecosystem
Having dedicated years to investing at the intersection of content and infrastructure uniquely positions us to support ventures that amplify human potential through powerful digital tools, forging stronger connections between technology and the people it serves. Our existing portfolio and track record give us both the credibility and the network to identify and support breakthrough infrastructure projects. We’re not new to this space. We’ve already built a strong portfolio that underscores our passion for cutting-edge tech, and we believe this is just the beginning.
Looking Ahead
For 2025, our key priorities include:
1. Deepening Our AI and Blockchain Infrastructure Portfolio
We will continue to invest in the critical layers of the next-generation stack, including specialized chips, next-gen data centers, crypto-enabled distributed compute, data privacy and security, and advanced ML frameworks that redefine performance, scalability, and trust. At the heart of these priorities is our conviction that technology should serve to expand human potential—helping people learn faster, create more engaging experiences, and solve complex challenges at scale.
2. Expanding Our Spatial Computing and Edge Capabilities
From VR storytelling to AR-based industrial training, we see vast potential in real-time, immersive applications that rely on robust back-end systems, decentralized protocols, and adaptive computing power at the network’s edge.
3. Heavy Focus on Agentic Tech
We see “agentic tech” as a powerful growth driver, relevant to everything from user data ownership to distributed compute. It’s also tightly aligned with the foundation we’ve already built around immersive content, Web3 gaming, and user-owned digital assets. The same decentralized and privacy-centric principles that guide our blockchain investments will become increasingly important in AI, where the concentration of computing power threatens to undermine individual autonomy. In 2025 and beyond, expect us to deepen our commitment to agentic tech — both on the protective side (investing in AI safety, privacy, and security) and on the proactive side (backing companies that build tools and platforms enabling genuine user agency). This aligns seamlessly with our ethos: building infrastructure that not only powers innovation but also amplifies human potential.
4. Leveraging Our Brand as Pioneering Investors in Digital Convergence As early believers in Web3 gaming and AI-driven content, we’ve been at the forefront of convergent technologies since day one. We believe our ability to bridge interactive media and enabling technologies gives us a unique vantage point. Our portfolio is well-positioned to capitalize on the rising tide of innovation that merges the digital and physical worlds—and we intend to remain a catalyst for the most transformative opportunities in this space.
We remain grateful for your support and partnership. Despite political twists, market volatility, and a challenging gaming market, 2024 has validated our conviction that the convergence of our digital and physical lives will profoundly reshape how we live, work, and play. We look forward to building on our success in interactive content and infrastructure as we drive toward another year of innovation, collaboration, and growth.
All the best,
Sam
Galaxy Interactive
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