April 11th Newsletter

Markets continued their roller coaster ride this week as President Trump announced a 90-day pause of his sweeping tariffs for countries who did not retaliate, while also raising the tariff on Chinese imports to 125%. This announcement caused the Nasdaq to rise 12.2% and the S&P 500 to soar 9.5%, its largest daily gain since 2008. Goldman Sachs quickly reversed its recession risk, moving from a recession baseline to a non-recession baseline in just 73 minutes. Even so, the S&P 500 tumbled 3.5% Thursday over rising fears of an escalating US-China trade war. Bridgewater Associates founder Ray Dalio urged President Trump to make a trade deal with China, while also cutting the US deficit to less than 3% of GDP. In tech, Trump said the TikTok deal remains active after extending the deadline for it to divest its US assets to June 19th, but legal hurdles and Wednesday's tariff tensions will delay progress. Whistleblower Sarah Wynn-Williams alleged that Meta aided Chinese censorship and data access, while Meta firmly denies wrongdoing. Additionally, OpenAI has countersued Elon Musk, accusing him of disrupting its mission with false claims and a takeover ploy. Also, Nvidia may avoid H20 chip export bans after CEO Jensen Huang pledged to invest in new US AI data centers. In Amazon’s letter to shareholders, CEO Andy Jassy reaffirmed Amazon’s aggressive spending in AI despite market uncertainty. Lastly, Alphabet is sticking to its $75B data center expansion plan, signaling strong conviction in its AI strategy amid rising costs and tariff-driven headwinds.

“We continue to believe AI is a once-in-a-lifetime reinvention of everything we know, the demand is unlike anything we’ve seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now.“ — Andy Jassy, Amazon CEO, from his 2024 Letter to Shareholders.

Top 5 AI Highlights

[1]📊Shopify CEO Tobi Lütke has implemented a new policy requiring teams to justify any new hires by proving AI can’t do the job. Employees must also demonstrate the current use of AI in their day-to-day tasks, with AI proficiency now a formal part of performance reviews. Lütke called AI adoption a “baseline expectation” and described it as the most significant shift in workplace productivity. The move follows industry trends, with Shopify’s headcount falling from 8,300 in 2023 to 8,100 in 2024 amid broader tech layoffs. More from CNBC and The Verge.

[2] 🔗Google DeepMind will integrate Anthropic’s Model Context Protocol (MCP) into its Gemini models and software development kit (SDK), aligning with OpenAI in supporting the emerging AI connectivity standard. MCP allows AI models to interface directly with business tools, content repositories, and development environments, enabling two-way data interactions for applications like chatbots. No rollout date was given, but DeepMind CEO Demis Hassabis confirmed the move on X, calling MCP “a good protocol” for the “AI agentic era.” Companies like Replit, Codeium, and Block have already adopted it. More from TC.

[3] 🧠 OpenAI is rolling out a memory feature for ChatGPT Pro and Plus users (excluding parts of Europe), enabling personalized responses by remembering past chats. Users can manage or disable the feature anytime. Meanwhile, OpenAI is reportedly exploring a $500 million acquisition of io Products, an AI hardware startup co-founded by ex-Apple design chief Jony Ive and CEO Sam Altman. The venture, backed by Emerson Collective, aims to build AI-powered devices that are less socially disruptive than smartphones. If the acquisition doesn’t proceed, a strategic partnership between the two companies is also being considered. More on the memory feature and the potential acquisition.

[4] 🏭The European Commission has launched its AI Continent Action Plan to accelerate regional AI development and address criticism that its regulations stifle innovation. Key initiatives include at least 13 AI factories and up to 5 gigafactories, backed by €200 billion in investment via the InvestAI initiative, including €20 billion for private funding. The plan also expands access to training data, introduces an AI Act Service Desk for compliance support, and promotes AI adoption in healthcare, public services, and industry. It marks a strategic shift to balance regulation with global competitiveness. More from CBNC and the EU.

[5] 🏥Dr. Mehmet Oz, in his first town hall as Centers for Medicare & Medicaid Services (CMS) Administrator, promoted using AI avatars to replace frontline healthcare workers, claiming they offer similar care at a fraction of the cost—$2/hour vs. $100/hour for doctors. While CMS has used AI for data analysis, Oz’s push for direct AI-patient interaction marks a major policy shift. The proposal has sparked public and internal concern, with critics questioning Oz’s credibility and the risks to vulnerable patients. Worsening unease is the lack of oversight mechanisms or formal trials to guide implementation. More from Wired.

Founder’s Corner

Median Series B Post-money Valuation is Approx. $150 Million

What We Read and Watched This Week

• US inflation fell 0.1% in March, but looming tariffs are threatening to drive prices higher. (Bloomberg)

• IRS chief Melanie Krause resigns over the IRS’ immigrant data-sharing agreement with ICE. (CBS)

• Klarna and StubHub delay IPOs as tariffs incite uncertainty in capital markets. (CNBC)

• Apple shipped 600 tons of iPhones from India using expedited customs to avoid the new 125% tariff on China. (Reuters)

• After a hydrogen-gun test explosion injured a co-worker, Ethan Thornton, a 21-year-old MIT dropout is now leading Mach Industries, an $85M defense tech startup backed by Sequoia Capital. (TC)

• Anthropic launched its $200/month Claude Max plan with 20x usage, targeting power users and enterprise-scale AI demand. (CNBC)

• Fascinating podcast on the formation of the Indian Premier League cricket organization (Acquired Podcast)

AI M&A and Fundraising news (Apr 4 — Apr 10)

• Arena: AI platform for hardware testing and optimization, raised a $30M Series B.

• Artisan AI: AI agents for sales and scheduling automation, raised a $25M Series A.

• Aurascape: AI-native enterprise security platform, raised a $50M Series A.

• BLNG: AI-powered jewelry design, raised a $3M Seed.

• CalypsoAI: AI security and orchestration platform for large language models, raised a $5M Seed.

• ConductorAI: AI compliance platform attributing work to policies, raised $12.22M.

• Glimpse: Automates deduction management for CPG brands, raised a $10M Series A.

• HoneyHive: Platform to test and optimize AI agents, raised a $7.4M Seed.

• Incident.io: AI-based incident management platform for IT teams, raised a $62M Series B.

• Ingenix.ai: AI-based healthcare foundation model for drug interaction simulations, raised a $9.79M Seed.

• Krea: Generative AI interface for visual creatives, raised a $47M Series B.

• Mugafi: AI to create stories, novels & screenplays, raised a $3M Seed.

• Nuro: AI-first self-driving car startup, raised a $106M Series E.

• Octane: AI security engineer for smart contracts, raised a $6.75M Seed.

• Ominimo: AI-powered car insurance pricing platform, raised $11M.

• Pax AI: AI-powered duty drawback management for customs compliance, raised a $4.5M Seed.

• PyannoteAI: Open-source AI toolkit for speech transcription, raised a $9M Seed.

• Qevlar AI: Autonomous AI platform for SOCs, raised a $10M Series A.

• Rescale: Accelerated computing for AI simulation and R&D, raised a $115M Series D.

• Rondah AI: Voice AI agents for dental front-desk tasks, raised a $1.8M Pre-Seed.

• Sagittal AI: AI teammate for software development cycle, raised a $2.2M Pre-Seed.

• SandboxAQ: AI and quantum software for enterprises, raised a $150M Series E.

• Sekoia: AI-powered security operations center platform, raised a $29M Series B.

• Series: AI-powered social network for college students, raised $3M.

• SigIQ: AI tutors for personalized learning in India, raised a $9.5M Seed.

• Solve Intelligence: AI document editor for patent attorneys, raised a $12M Series A.

• Sourgum: AI platform for waste/recycling ops, raised a $12.5M Series A.

• Starhive: AI-driven IT ops and asset tracking, raised $5M.

• Ten: AI platform for GPU infrastructure and user management, raised a $6.83M Series A.

• YRIKKA: AI red teaming tools for cybersecurity, raised a $1.5M Pre-Seed.