Last Week in ConTech - 2 March 2026
ChatGPT is a loss leader for OpenAI
Deep Insight: ChatGPT is a loss leader for OpenAI
“LLM-based systems, as we know them today, won’t be around in 3 to 5 years.”
This was a comment Rohit Sinha, the CTO of SmartPM made when we were discussing the growth of AI wrapper startups.
His point wasn’t that AI would disappear.
It was that many of the current business models rely on external model providers whose economics are still fundamentally unresolved. Which brought us to our next discussion point:
AI subscription costs are heavily discounted.
The real cost of ChatGPT’s $20 subscription should be multiples higher. Just take a look at their accounts.
This year they’ll generate $13b in revenue and still burn $9b. They’ll continue to lose money until 2028, where they predict an operating loss of $74b but by 2030, things will turn around as they project an expected $200 billion in revenue.
It matters because OpenAI has committed to spending $1.15 trillion on hardware & cloud infrastructure between 2025 to 2035. If they fail to realise these numbers, it will significantly impact the data centre construction industry.
But what is more concerning is how much the cost of compute and energy is subsidized by venture dollars.
OpenAI’s current strategy isn’t about revenue, it’s about dependency.
The more AI is embedded into workflows and becomes an operational necessity, the less elastic the price is. It’s because the switching cost is no longer just the software fee, but in retraining teams, rebuilding processes and rearchitecting systems.
Contexualizing to AEC, a similar example would be if Autodesk suddenly increased their prices. As you are dependent on their software, having invested in aligned processes and plugins, you can’t easily switch in the near term.
So how do you overcome that?
According to Rohit, and increasingly reflected across the industry, the underlying technological innovation is replicable with open source tooling. It allows you to run your own model at much lower costs.
It’s an approach construction startups are undertaking. In SmartPM’s case, as they are focused on scheduling so they don’t need a large language model. Instead they have developed their own focused, smaller model using their scheduling data. The approach means that their infrastructure costs are significantly lower and they aren’t reliant on an external provider.
It’s a topic which will increasingly come into focus as enterprise copilot rollouts become the norm. Executives will need to evaluate pricing risk, vendor lock in, and the tradeoffs between buying external solutions or building internally.
What many companies are adopting today may not reflect the true long term economics of AI. And for construction firms embedding AI into their workflows, the biggest risk may not be adoption, but dependency.
In this issue there are:
8 Startup Fundings
16 Policy and Regulatory Changes
8 New National Infrastructure Projects & Priorities
0 New investment funds
0 Acquisitions
6 News articles
83 new jobs posted - view here
Reading time: 13 mins
Startup Funding
Fleet Management
Elevāt, a Seattle startup, raised $12m in Series A funding. They are building a platform that helps companies in industries like construction and equipment makers streamline repairs and reduce downtime by combining telemetry, fault codes, manuals and repair history into AI driven guidance for technicians to improve first time fix rate and reduce mean time to repair. More here.
Construction Management
Sensera Systems, a Colorado startup, raised $27m in Series B funding. They provide jobsite intelligence using cameras and onsite video capture to provide security, progress monitoring and safety solutions. More here.
Preconstruction
MeltPlan, a Californian startup, raised $10m in funding. They are building a planning engine for the built environment with 3 main products including MeltCode for building code research and compliance, Melt Takeoff for takeoff services and Melt Bid for bid scoping and leveling. More here.
Manufacturing / Prefabrication
Wootzwork, an Indian startup, raised $6.6m in Series A funding. They connect equipment manufactured with vetted factories in India to manage sourcing, production, and quality control for a number of industries including construction, offering end to end construction equipment solutions including HVAC systems, scaffolding, fire suppression units, skid-mounted plants, and fasteners. More here.
Physical AI
ZaiNar, a Californian startup, raised $100m in funding. They have developed a 5G based positioning technology that uses the network as a sensor to deliver sub-10cm accuracy at ranges up to 1.5km working on both bandwidth constrained private 5G and low power 5G IoT networks, positioning itself as the foundation layer for AI. More here.
Notes:
ZaiNar is positioning itself as a foundational infrastructure layer for robotics, enabling precise autonomous navigation indoors and beyond line of sight, where traditional GPS systems fail.
However, the opportunity in construction extends well beyond robotics.
Their real time location tracking creates a core data layer that can support a wide range of high value safety and operational applications.
One example is ZaiNar working with construction companies to secure hazard zones through live equipment and worker tracking.
For example, dynamic safety zones can be created around heavy machinery, with the ability to automatically cut power or trigger alerts if a worker enters a restricted area.
This approach could significantly reduce reliance on camera based systems and wearable sensors, which are often expensive, complex to deploy, and often require custom software integration.
Additionally, this technology has applications for smart cities and traffic management, allowing for dynamic traffic management.
One challenge I’ve noticed when driving in the US is that traffic light cycle times are incredibly long and fixed.
I’ve often seen cars run a red light just after it’s changed to avoid waiting through another full cycle.
In Australia, almost every signalized intersection has underground sensors allowing for the signal time to be adjusted dynamically based on traffic flow and to minimize queue length.
Enabling technology such as this would be incredibly valuable at improving network level traffic signalling.
Construction
Ground Control Development, a Los Angeles startup, raised $2m in funding. They provide real estate and construction services for startups building hardware in sectors like aerospace, defense, energy, EV, robotics and advanced manufacturing. More here.
Notes:
They provide services from facility selection to construction execution and maintenance operations.
The thesis here appears to be that startups which require facility or factory builds, don’t have the construction expertise in house.
Ground Control Development provides the site development, construction execution and ongoing management services allowing them to focus on developing the technology.
It’s interesting that they have raised funding but from their website they appear to be a construction company.
There is no indication of a proprietary technology layer though their post states they are building the facilities management platform for hard tech and they are hiring for a CTO indicating it is in the pipeline.
Asset Management
Neural Earth, a Miami startup, raised $9.3m in Seed funding. They have developed a geospatial risk intelligence platform able to orchestrate business data, satellite imagery, environmental sensors, and proprietary datasets in one platform and convert complex geospatial queries into simple analysis as well as provide AI driven climate, wildfire and flood risk scoring. More here.
Notes:
Global climate adaptation requires ~$540 billion annually to meet current protection standards.
While this software is primarily used by the insurance and real estate industries to provide portfolio level insights into risk, it can also be used by State and Local governments for planning.
It is able to identify areas of high risk and allow for the strategic application of remediation measures.
One example is identifying power lines near forests or dry vegetation and installing them underground or adding fast-acting shutoff devices or insulating high risk sections.
Other
Seamflow, a London startup, raised $4.5m in Seed funding. They are developing AI software to help testing, inspection, and certification (TIC) organisations streamline audits and approvals and help support faster certification. More here.
Notes:
Before a product can be commercialized or infrastructure becomes operational, independent experts are required to conduct audits, review documentation and issue formal approvals.
They are initially focusing on medical devices but looking to expand across the broader TIC industry and could be used by TIC companies in the construction sector.
Policy and Regulatory Changes
US
White House Offers New Details on Its Push to Ban Housing Investors
The White House proposed banning investors with more than 100 single-family homes from purchasing additional homes.
The proposal includes various exemptions from the ban, including for investors who build or heavily renovate homes for the sole purpose of renting them out.
Bipartisan group of lawmakers reconsiders California’s nuclear moratorium
A bipartisan group of California lawmakers has introduced legislation to exempt modern nuclear reactors from the state’s decades-old moratorium on new plants.
If passed, it would allow nuclear fission or fusion energy systems approved by the Nuclear Regulatory Commission since 2005 to be built.
California banned new reactors with a 1976 law that requires the federal government to certify a method for permanent disposal of high-level nuclear waste before more plants can be built.
Notes:
California has set a goal for 100 percent clean energy by 2045, using renewable and other carbon-free resources like nuclear energy.
In Village of Euclid v. Ambler Realty Co., a suburb just east of Cleveland barred a real estate company from using their land for industrial use.
The developers sued and brought it all the way to the nation’s highest court, which affirmed that municipalities could impose zoning to organize development, as a police power.
The ruling gave constitutional blessing to the establishment of permissible uses on specific properties.
It has led to: residential homes in one part of town, commercial and retail in another, and manufacturing and industrial uses in yet another.
Progressives and pro-housing advocates in the Yes in My Backyard (or YIMBY) movement have joined defenders of property rights and free-market libertarians in declaring zoning as outdated.
They blame local land use regulations for blocking apartment construction, exacerbating the housing crisis and perpetuating racial disparities in home ownership.
33 states have passed reforms to allow more density in zones once reserved for single-family homes only.
Thousands of communities have re-legalized mixed-use development, seeking to blend housing with shops and restaurants in walking distance
What the Supreme Court tariff ruling means for construction
Contractors in certain niches can expect some meaningful materials price reductions.
This is for specialty equipment, HVAC and electrical systems and fixtures, according to Anirban Basu, chief economist at Associated Builders and Contractors.
Interior scales back environmental regulations for public lands
The Interior Department, which is in charge of the nation’s public lands and waters, has completed a major scaling back of its environmental regulations.
It has rescinded more than 80 percent of its previous environmental regulations under the National Environmental Policy Act (NEPA).
It is aimed at cutting down delays and costs for energy, minerals, livestock grazing, infrastructure, wildfire mitigation, water projects and conservation efforts.
Newsom authorizes $590 million loan to fund Bay Area public transportation
Senate Bill 117 authorized the $590 million loan to help stabilize public transportation agencies across the Bay Area.
The new loan, which will be paid back over a period of 12 years, is not a long-term solution, but will prevent short-term cuts to services to public transportation agencies.
Trump Administration upholds Biden-era rule mandating nationwide lead pipe replacement
The U.S. Environmental Protection Agency has confirmed it will defend stringent lead-in-drinking-water requirements adopted in 2024.
The agency told a federal appeals court in Washington it supports a 10-year deadline for most water systems to replace lead service lines.
Interior jump-starts solar energy permitting
The Interior Department could be softening its hard-line stance on solar energy.
Interior is reviewing at least 20 commercial-scale projects that have languished in the permitting pipeline since Trump took office.
That includes a package of six utility-scale projects given the green light by Interior Secretary Doug Burgum to resume active reviews.
The public opposition to AI infrastructure is heating up
A new bill in New York State would impose a three-year moratorium on the issuance of new permits for data center construction throughout the state.
The New Orleans City Council passed a moratorium, pausing all new data center construction in the city for one year.
In early January, Madison, Wisconsin, passed a similar law after protests erupted over regional tech projects.
Similar policies have also passed in droves of communities throughout construction hot spots like Georgia and Michigan.
Apple Drops ESG Links From Top Executives’ Pay Packages
Apple Inc. has dropped an “ESG modifier” from its 2025 pay packages for top executives.
This allowed the board to adjust annual bonuses based on performance on environmental measures.
The share of S&P 500 companies tying executive compensation to environmental metrics fell to 46.7% in 2025.
Notes:
This could have implications to construction as they build and operate their own data centers.
U.S. Supreme Court rejects challenge to New Jersey affordable housing law
The U.S. Supreme Court has refused to block New Jersey’s new affordable housing law.
This allows the state’s updated framework for requiring municipalities to plan for affordable homes to continue moving forward.
Courts at every level of the state and federal judiciary have now declined to intervene, marking the eighth unsuccessful legal challenge to the law’s implementation.
The lawsuit was filed by roughly three dozen municipalities led by the Bergen County borough of Montvale.
EU
EU Launches €1.8 Million Heat Pump Subscription Model for Leased Commercial and Public Buildings
The EU has launched a €1.8 million ($2.15 million) subscription model, funded through its LIFE Program from November 2025 to October 2028.
This is to encourage the adoption of heat pumps in leased commercial and public buildings.
The model shifts heat pump ownership, installation and maintenance to a service provider, a third party separate from the landlord or tenant.
To spread the initial cost of the heat pump over time, end users pay a subscription fee.
Germany
German government drops mandatory renewable energy share for heating
The coalition of chancellor has decided to drop a mandatory renewable energy quota for new heating systems.
Homeowners will be allowed to continue installing oil and gas boilers without restrictions.
Suppliers should gradually increase the share of “green” fuels in their networks from 2029.
Vietnam
Three major land and construction reforms take effect in 2026
Converting garden land to residential land requires only 30 percent payment.
Currently if the agricultural land price under the local land price list is US$80, while the residential land price is US$400, residents must pay US$320 when changing land-use purposes.
Under the new regulation, residents converting land within this quota would pay only 30 percent of the difference (US$96).
Real estate to receive electronic identification codes.
Houses under seven stories exempt from construction permits
Hong Kong
Hong Kong Infrastructure Brief: New Rules Make Rail Development Faster, Cheaper
Hong Kong’s new guidelines on railway building will cut the cost of mass-rail development.
Streamlined standards should help the government cut spending on these projects, while maintaining safety and service standards.
These guidelines align Hong Kong standards with those used in mainland China, and globally.
The guidelines will help mainland Chinese firms capitalize on the large Hong Kong market.
National Infrastructure Projects & Priorities
Global
Data Center Exposure Is Saving Grace for Construction Firms
Construction and building materials companies in Europe are pivoting to the data center market due to a struggling housing market and weak industrial activity.
Mentions of “data centers” in the earnings reports of construction and building materials firms have been hovering around record levels, highlighting the importance of this end market.
US
US Data Center Construction Fell Amid Permit and Power Delays
Construction of new data centers in the US fell for the first time since 2020 despite soaring demand for artificial intelligence computing capacity.
Capacity under construction fell to 5.99 gigawatts at the end of 2025 from 6.35 gigawatts at the end of 2024, according to CBRE Group Inc.
Local pushback against massive AI data center projects has intensified in recent months.
Energy Department Announces Largest Loan in Department History
U.S. Secretary of Energy announced the Department of Energy’s (DOE) Office of Energy Dominance Financing (EDF) has closed a historic $26.5 billion loan package.
The two loans will build or upgrade over 16 gigawatts (GW) of firm reliable power to the electrical grid.
This includes 5 GW of new gas generation, 6 GW in nuclear improvements through uprates and license renewals, hydropower modernization, battery energy storage systems and over 1,300 miles of transmission and grid enhancement projects.
New U.S. electric generating capacity expected to reach a record high in 2026
U.S. power plant developers and operators plan to add 86 gigawatts (GW) of new utility-scale electric generating capacity to the U.S. power grid in 2026.
43.4 GW of this is to be new utility-scale solar capacity.
In 2025, 53 GW of new capacity was added to the grid, the largest capacity installation in a single year since 2002.
Trump announces $33B power plant project for SE Ohio, surprising local commissioner
Portsmouth, Ohio, has been selected as the site of a new natural-gas fired power plant that will be the largest of its kind in the world.
It will be a $33 billion natural gas power facility with the capacity to produce 9.2 gigawatts of power.
China
China’s high-speed rail network accelerates world’s largest human migration
China reached 50,000km of high-speed rail, enough track to circle the globe, compared with 8,500km in the whole of the EU as of 2023
Just over two decades after it was launched, the network now links 97 per cent of cities with populations of more than half a million.
Africa
Africa primed for solar breakthrough after record capacity growth
Africa installed a record 4.5 gigawatts (GW) of photovoltaic (PV) solar power capacity in 2025, a 54% increase from the year before.
Eight different countries added at least 100 megawatts (MW) of solar capacity last year, which was double the number of countries at that threshold in 2024.
South Africa has the largest total solar capacity footprint in Africa, likely just above 10 GW following a 1.6 GW addition to capacity in 2025.
Uganda to link new railway line to Tanzania, opening up new export route
Uganda wants to link a new railway line it is building to one under construction in neighbouring Tanzania.
This would open up a new export route for minerals like gold, copper and iron ore.
News
Top 50 Contech Startups (CEMEX Ventures)
Arada to deploy Australian construction arm in GCC and UK
UAE developer Arada will import its Australian contracting company Roberts Co to the Emirates to support its projects in the region and the UK.
Silicon Valley is building a shadow power grid for data centers across the U.S.
These designers made a sustainable new building material from corn
Uber invests in EV infrastructure for its drivers
How to Build the World’s Most Expensive Nuclear Power Plant
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.