February 14th Newsletter

Before we unpack this week’s actions, click here for our deck highlighting the financials from selected public companies.

A recent 3% inflation reading suggests that inflation is now more entrenched, signaling that higher prices may linger more than anticipated. Also, The US added 143,000 jobs in January, with unemployment at 4% and wages up 4.1% year-over-year. Trump’s new 25% tariffs on steel and aluminum, along with trade tensions, add further uncertainty to inflation. Despite new Trump tariff threats, strong corporate earnings propelled U.S. stocks near record highs, overshadowing lingering inflation worries. Meanwhile, Elon Musk and the Department of Government Efficiency (DOGE) face a lawsuit over unauthorized access to government records, raising data privacy concerns. Additionally, Apple is reportedly exploring humanoid robots, projecting 2028 for mass production. Lastly, on Sunday, the Super Bowl attracted a record 127.7 million viewers, partly due to a boost from free streaming.

Monthly AI Financing Report: Starting in February, we will be sharing a monthly report of the top AI financing activity gathered from public and proprietary sources. See the latest report here.

Top 5 AI Highlights

[1] 💰OpenAI plans to unify the “o” series into GPT-5 while outlining the roadmap, integrating all tools across tasks, and eliminating the standalone o-series models. CEO Sam Altman predicts that the cost of using AI will decrease tenfold each year. He compares this trend to Moore’s Law but at a much faster rate, citing how the token cost from GPT-4 to GPT-4o dropped 150 times. Altman also argues that AI intelligence grows in direct proportion to investment and that there is no reason for exponential spending to slow down. Additionally, Open AI devs released some “best practices” for using the o-series. Read more from BI and X.

[2] ⚔️Elon Musk’s consortium has offered a staggering $97.4 billion to buy out OpenAI’s nonprofit arm, escalating tensions with OpenAI CEO Sam Altman. Rumors suggest the nonprofit unit could be only worth $40 billion. In a court filing, Musk pledged to withdraw his bid if the board halts OpenAI’s for-profit transition, complicating the value of OpenAI buying out the non-profit arm. Meanwhile, OpenAI is fast-tracking its own AI chip production to reduce reliance on Nvidia by 2026. On that topic, Perplexity’s latest Sonar is using Cerebra’s chips to reduce reliance on Nvidia chips. OpenAI also ran a $14 million Super Bowl ad, describing AI as the next major technological breakthrough. More from Reuters, YF, and TC.

[3] 💰 French President Emmanuel Macron announced a €109 billion ($112 billion) AI investment to position France as a global leader, with funding from international and domestic sources. The investment will primarily support AI-focused data centers, aligning with the U.S. Stargate initiative. Macron highlighted Europe’s AI competitiveness, citing startups like Mistral and LightOn. France also aims to leverage its nuclear electricity surplus to attract AI investments. Read more from TC.

[4] 🏛️Vice President JD Vance, speaking in Paris, urged Europe to dismantle AI regulations. He emphasized an America First strategy, ensuring top A.I. systems use American-designed chips. Criticizing the EU’s Digital Services Act and other policies, he argued they stifle innovation and urged prioritizing growth over excessive oversight. His speech reinforced the Trump administration’s push for deregulation, aiming to solidify U.S. A.I. leadership while pressuring allies to adopt an innovation-friendly approach. Notably, the U.S. and U.K. declined to sign a universal AI declaration. More from WSJ.

[5]🧠Former OpenAI chief scientist Ilya Sutskever’s AI startup, Safe Superintelligence (SSI), is in talks to raise funding at a $20 billion valuation, a fourfold jump since September. Unlike OpenAI, SSI emphasizes AI safety over rapid commercialization. Founded in June with ex-Apple AI lead Daniel Gross and former OpenAI researcher Daniel Levy, SSI remains secretive about its technology. However, Sutskever’s reputation and novel AI approach have fueled investor interest, highlighting the ongoing demand for safe, advanced AI development. More from YF.

Founder’s Corner

The number of M&A deals was higher across all rounds

What We Read and Listened to This Week

• US Vice President JD Vance’s keynote speech at the Paris AI Summit warned that heavy regulations could kill AI. (Youtube)

• Adobe launches Generate Video in public beta, the first commercially safe AI video model, competing with OpenAI’s Sora and Google’s Veo.(TheVerge)

• Elon Musk’s X will pay $10 million to settle Trump’s lawsuit over his 2021 ban, following Meta’s $25 million settlement, with Google talks continuing. (WSJ)

• Google CEO Sundar Pichai predicts practical quantum computers are 5-10 years away, likening their progress to AI’s early development in the 2010s. (BBG)

• Reddit shares dropped 5% as Q4 earnings missed estimates, with DAUs below forecasts despite 40% growth, while revenue beat expectations and Q1 guidance remained strong. (YF)

• Chevron will cut up to 8,000 jobs by 2026 to reduce costs, simplify operations, and address challenges, including its delayed $53 billion Hess deal. (Reuters)

• Temu and Shein's U.S. sales dropped up to 41% after Trump removed a key duty exemption, discouraging consumers from purchasing their low-cost imports. (BBG)

AI M&A and Fundraising news (Feb 7 — Feb 13)

• &AI: AI agent for patent attorneys, raised a $6.5M Seed.

• 7ai: AI agentic security platform, raised a $36M Seed.

• 75F: IoT and AI-driven commercial HVAC automation startup, raised a $45M Series B.

• Addlly AI: AI-powered tool for marketing and content creation, raised a $0.88M Seed.

• Aiko: AI-driven automation for satellite mission operations, raised a $4.5 Series A.

• Andesite: AI-powered security operations platform combining human expertise, raised a $23M Seed.

• Breakthrough: AI-powered platform provider for B2B storytelling in sales and marketing, raised a $0.60 Seed.

• Dev AI: Agentic AI solutions startup, raised a $6M Seed.

• Drata: A security compliance firm acquired SafeBase, an AI model for security documentation, for $250M.

• EnCharge AI: Chip startup developing memory chips for AI, raised a $100M Series B.

• Era: AI-driven automated wealth and finance management platform, raised a $9.36 Seed.

• EvenBetter: AI-powered software for workplace equity, raised $0.31M.

• Groq: AI chip startup secured a $1.5B commitment from Saudi Arabia.

• Harrison.ai: Australian CT scan, X-ray, and pathology slide AI analysis firm, raised a $112M Series C.

• Harvey AI: A legal artificial intelligence platform, raised a $300M Series D.

• FuriosaAI: Meta is looking to acquire this South Korean chip manufacturer for advanced AI models.

• Model ML: AI data and financial analysis platform, raised $12M.

• Neom: Saudi Arabia’s company building futuristic cities, is teaming up with data center startup DataVolt on a $5B AI infrastructure project.

• Positron: Reno, Nevada-based AI chipmaker for inference, manufactured in Arizona, raised a $23.5M Seed.

• ROOST: Open source initiative by OpenAI, Discord and Google to utilize AI for online child safety, raised $27M.

• Salience Labs: Photonic solutions startup for AI data center infrastructure, raised a $30M Series A.

• Sardine: Fraud-fighting AI agent provider for enterprises, raised a $70M Series C

• Tines: Dublin-based cybersecurity and business automation AI, raised a $125M Series C.

• ToumAI Analytics: French AI-powered multilingual voice technology enhancer, raised $1.04M

• TrueFoundry: A startup that enables enterprises to deploy AI systems at scale, raised a $19M Series A.

• Uvionix: AI-driven automated inventory management startup, raised a $3.5M Seed.

• Voyantis: Tel-Aviv based AI predictor for customer propensity, raised $41M.