CD NOTES

  1. Flirting with Oblivion

    Chain Drain interviewee Brad Hargreaves writes on LinkedIn about a surprising takeaway, after attending the Blueprint conference:

    There’s serious appetite for M\&A in proptech right now… It felt like every other company I sat down with was looking to buy startups. And it wasn’t just the big PE groups, either. Plenty of them were operating companies looking to make strategic acquisitions that plug into what they already do.

    These weren’t dumpster divers hunting for cheap acquihires of overfunded, underperforming companies….
    As far as I can tell, there’s one reason for this: data moats.

    Everyone has figured out that features aren’t a defensible moat in a world where AI can build them for you… It’s data that the frontier models don’t have: construction projects and bidding, maintenance requests and tenant complaints, building systems breakdowns, leasing inquiries and tour bookings.

    All the data cruft these unprofitable startups have been generating for years is now gold, and the incumbents are willing to pay real money for it.

    Not 24 hours after Greg texted me about this, I saw an ad on Instagram for Nyne.ai promising exactly that: “6-figure payouts” for data from firms with 20+ W-2s. *BB-9/29/26

  2. Learning is how a Firm Survives Disruption

    Ian Keough, CEO of Hypar, writing on LinkedIn about learning loops as the lifeline of firms in the AECO sector grappling with AI-induced change: “If differentiation begins with the first client conversation, Design Technology has to reach beyond production. Systems should help senior planners apply firm expertise to each client and return new knowledge to the practice. The client experience is at stake.”

    In other words, fix the chain drain to save your firm. *BB-9/25/26

  3. Rewarding “Human Skills” is a Very Play Scenario Thing to Do

    Large consultancy firm Ernst & Young is giving bonuses to employees “who show skills like adaptability, innovation and judgment,” according to Wall Street Journal (as well as experimentation with AI). This reads like the big consulting version of what we describe in the Play scenario, with AECO firms investing in the skills needed to build strong relationships with a dwindling pool of clients and potential clients. *BB-9/6/26

  4. One Giant LEAP Into the Known

    Speaking to an invitation-only crowd of global investors, founders, and assorted hangers-on on the eve of LEAP — the Gulf’s (if not the world’s) largest tech conference — HUMAIN CEO Tareq Amin had a message for attendees hailing from the anglosphere. “For our guests from America, Canada, and Australia, how long do you think it took us to get the permitting” for the Saudi AI champion’s data centers currently under construction in Riyadh and Dammam? According to The New York Times, “the company expects to deploy a total of 250 megawatts of power to its data centers by the start of 2027 and has a goal of supplying six gigawatts of power by 2034. The total project is estimated to cost \$77 billion.”

    The answer, Amin triumphantly announced, was “One week.” In the U.S., the average time elapsed for large infrastructure projects is 4.5 years. That, in a nutshell, is the Play scenario in action, as intractable delays, geopolitical barriers, and too much money chasing too little infrastructure lead AECO firms to follow said money and build where they can — especially as America’s data center backlash continues to build. *GL-9/4/26

  5. NYC Launches Circular Construction Hub

    New York City unveils its first-ever circular construction hub today called MADE at Bush Terminal. It has been enabled via NYC EDC funding and is explicitly part of the city’s goal to shift the material supply chain for the built environment. Love to see the Pause scenario becoming real, bit by bit.

    “Construction and demolition debris accounts for 40% of the City’s total waste generation and represents a major stream of carbon emissions and economic value that can be recaptured and reused,” said NYCEDC’s Interim President and CEO Jeanny Pak. “Cities have a responsibility to create the conditions for innovation to succeed, and by partnering with Our Temenos through this pilot, NYCEDC is helping de-risk new approaches to material reuse and generating the real-world data needed to understand how circular construction can shape the future of building in New York City.”

    Also happy to see Chain Drain informant Sydney Mainster recognized in the press release for her great work on glass recycling in commercial construction! *BB-9/2/26

  6. Survey of Architecture Firms Using AI

    Design blog Dezeen asked 53 leading architecture studios about their use of AI. 26 (49%) replied, one saying that they do not allow it and 25 (47%) actively encouraging it. There’s a split between those that are being proactive by building their own tools and those that are letting it wash over them:

    A key trend emerging alongside the use of these AI tools is the development of in-house AI systems, favoured for their personalisation and data privacy. More than half of the studios that told us they are using AI have created in-house systems, including Foster + Partners, Hassell, Heatherwick Studio, MVRDV, OMA and Gensler. Notably, despite enthusiastic adoption of AI at many studios, only 19 confirmed that they have established AI policies.

    If we had done the survey, we would have asked where the AI leadership is located within these firms: with the CEO, head of IT, a digital team, or some other office? The answer to that says a lot about how an organization is relating to the emergent changes around them. *BB-9/2/26

  7. Where the Rentals Meet the ROAD

    Congress spent most of this year threatening to lock institutional investors out of single-family rentals before finally relenting. But the 21st Century ROAD to Housing Act still bars large-scale owners from acquiring further properties, with the exception of newly constructed build-to-rent (BTR) housing. You’ll never guess what happened next — investors that spent a decade outbidding first-time buyers of existing homes are now underwriting entire master-planned BTR communities, CRE Daily reports.

    While single-family rental owners have come under heavy criticism for aggressively evicting vulnerable tenants and squeezing renters, BTR potentially holds more promise. A vertically-integrated owner that entitles, designs, builds, and then holds entire communities for thirty years would have something everyone else in the AECO chain covets — a learning horizon long- and wide enough to learn from. Coupled with the access to capital necessary for making long-term investments in more efficient and resilient infrastructure, BTR might just have the makings of a virtuous circle.

    The caveat is whether the business model survives contact with the markets. According to a survey by the National Apartment Association, 84% of respondents name rising construction costs as their top concern, while yields are already compressing under new supply. (Good if you’re a renter; bad if you’re an investor.) *GL-8/27/26

  8. Respect My (Land Use) Authority!

    More than 500 bills introduced in 40 states last year contained clauses pre-empting county land-use authority, according to an analysis by the National Association of Counties, reports Smart Cities Dive. A large minority (38%) explicitly aimed to curtail local control in order to streamline permitting, allow accessory dwelling units (which comprised nearly 40% of all new housing in California last year) or ease parking requirements.

    In the paper, we identified fragmented local, state, and federal regulation as a significant obstacle to the built environment sector’s achieving the economies of scale seen in software or manufacturing. While county officials might be alarmed at state legislatures’ efforts at pre-emption — although less than a third of those 500 bills passed — more harmonized regulations are a welcome development.

    “Often, the problem is a failure to modernize and keep up with the changing times we live in,” Illinois Gov. JB Pritzker said while proposing a statewide zoning measure earlier this year. “It all adds up to bureaucratic red tape that unnecessarily increases costs, delays construction and frequently kills projects altogether.” *GL-8/27/26

  9. Here Come the Robot Swarms

    The EU has funded projects under a call for “autonomous robot collectives delivering collaborative tasks in dynamic unstructured construction environments.” This video from lead research Sihao Sun and team at TU Delft provides an example: three drones work together to lift an object, manipulating it impressively with cables through various obstacles on a simulated construction site. Think construction that looks like a slow motion action sequence from a super hero movie. Pretty wild.

    A team including University of Bristol, TU Delft, numerous other european universities, and Foster + Partners will use the funding to apply this technique to “inverted timber fabrication,” which involves making assemblies on the ground plane before lifting them into place. The goal is to make construction safer (by reducing human labor?) and easier to execute (by working on the ground plan). Such automation reads as Fast Forward with notes of Eject. *BB-8/27/26

  10. What If We Never Built Another New Building?

    Great example of the Pause scenario today from Reasons to be Cheerful: If [architect Barbara Buser] were in charge, “I would stop every project,” she says emphatically, “then review them all through the lens of sustainability. If a project cannot meet strict carbon targets, it shouldn’t be built.” Instead of measuring success in Swiss francs, she argues, “the currency should be CO2.” There’s a new film about her work coming soon. *GL-8/24/26

  11. ProCore invests in Reality Capture to the Tune of $845M

    AEC heavyweight ProCore PCOR dropped serious coin on a drone-based reality capture company in a cash transaction. The data DroneDeploy comes with includes 20 trillion (!!!) square feet of site imagery alone, giving the parent company more fuel for training their AI. “DroneDeploy CEO Mike Winn said the acquisition reflects what customers have consistently asked for, that reality capture should be a native part of how they work rather than a separate tool.” This is showing how Fast Forward is disproportionately available to those with access to capital – product-based businesses and only the largest of professional services firms. *BB-7/30/26

  12. McKinsey is Betting on Fast Forward

    McKinsey dropped a new report titled “How AI is reshaping the future of the AEC industry” that lines up pretty nicely with our Fast Forward thesis. Included in their recommendations is a suggestion to focus on workflows or domains rather than tasks. This speaks to the capabilities of AI as much as it does the discoordination challenges natural to the AECO sector.

    Here’s a battle coming for leaders of Fast Forward firms:

    “Vendor data rights are another advantage that AEC leaders consistently underestimate. As AI capabilities improve, technology vendors are pushing harder to access project data and the rights to learn from it and reuse it to create new products, or to put guardrails around how their products or software can be used to train proprietary models. They are also increasingly competing to control workflows, learning loops, and business opportunities built on top of project data. Firms that overlook the details of vendor agreements risk giving away too much control and long-term advantage.” *BB-7/16/26