February 28th Newsletter

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

The "Magnificent 7" tech stocks, which powered S&P 500 gains for two years, have fallen 10% since December based on an index compiled by BBG, erasing $1.5 trillion amid tariff and inflation concerns. Additionally, on Thursday, the S&P 500 fell 1.6%, erasing YTD growth as Trump plans an additional 10% tariff on Chinese imports and 25% tariffs on Canada and Mexico starting March 4th. Amidst all the cost-cutting by DOGE, federal agencies clash over Musk's email to explain what they accomplished last week — or risk losing their job, as the Trump administration faces internal resistance. In tech, xAI is temporarily offering Grok 3 for free, but paid users ($30-$40/month) get advanced features. Nvidia's Q4 revenue grew 78% YoY to $39.3B, beating estimates, with Blackwell AI chips in record demand. Despite this, Nvidia stock fell 8.48% on Thursday as fears of tariffs affecting its sales in China have caused continuing sell-offs in the market. 

Monthly AI Financing Report: Since January, we started 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 (Flurry of Major Model Releases)

[1] 💡OpenAI introduced GPT-4.5, its most advanced model, improving pattern recognition, emotional intelligence, and reducing hallucinations by 37.1%. Available to Pro users ($200/month) and developers, the model outperforms GPT-4o in factual QA tests. Early testing shows it provides more natural conversations and better understands user intent, with a 56.8% win rate over GPT-4o in creative tasks. Meanwhile, OpenAI is shifting its infrastructure from Microsoft to SoftBank-backed Stargate, a $40B data center expansion that will secure 75% of its computing power by 2030. As more progress is made for foundational models, Microsoft CEO Satya Nadella stresses economic impact over AGI hype. Read more from OpenAI, The Information and Gizmodo.

[2] 📦Amazon introduced Alexa+, a generative AI-powered assistant offering enhanced conversation, personalization, and automation. It manages smart homes, makes reservations, tracks purchases, and integrates with various services. Free for Prime members, it is $19.99/month otherwise. Alexa+ features "agentic capabilities," allowing it to navigate the web, complete tasks independently, and provide real-time assistance. It uses a ‘‘model-agnostic“ approach as it picks the “best“ model for a given task. The service will roll out in the U.S. over the coming weeks, prioritizing Echo Show users and expanding to more devices later. More from Amazon and TechCrunch.

[3] ⚙️Anthropic unveiled Claude 3.7 Sonnet, its most advanced AI model yet. Featuring a hybrid reasoning system, it blends real-time responses with deep thinking, simplifying user interaction. Claude 3.7 outperforms rivals like OpenAI’s GPT-4o and Google’s Gemini in various benchmarks. Users can toggle the hybrid mode or set a time budget for tasks. Amazon has invested $8B, and Anthropic is close to raising $3.5B at a $61.5B valuation from Lightspeed, General Catalyst and Bessemer. Details on CNBC and Reuters.

[4] 💰 Meta is reportedly exploring a $200B+ AI data center campus in states including Louisiana, Wyoming, or Texas, though the company dismisses these claims as mere speculation. On Thursday, Apollo Global Management entered talks to lead a $35B financing package for Meta’s U.S. AI expansion. This follows Meta’s earlier announcement to invest up to $65B in AI infrastructure for 2025. Meanwhile, Microsoft, after reports of canceling significant U.S. data center leases, has clarified that its $80B infrastructure spending remains on track while strategically adjusting investments. Analysts see these moves as a recalibration amid rapid AI demand and evolving competitive pressures. Details on the $200B, $35B and Microsoft.

[5]  🍏 Apple is investing $500 billion in the US over four years to grow its AI, chip engineering, and manufacturing. Plans include a new Houston facility for server production, doubling its Advanced Manufacturing Fund to $10 billion, and expanding R&D hubs nationwide. Apple will hire 20,000 workers, boost silicon production at 24 factories, and open a Manufacturing Academy in Detroit to train workers in AI-driven manufacturing. This major investment strengthens Apple’s role in advancing technology and supporting economic growth. More from NYT.

Founder’s Corner

What We Read and Listened to This Week

• Salesforce reported $9.99B in Q4 revenue, versus $10.04B expected, though EPS of $2.78 beat estimates of $2.61. The company also signaled weak guidance. (CNBC)

• Snowflake reported $943.3M in Q4 revenue, beating estimates of $915.8M, as well as forecasting fiscal 2026 product revenue of $4.28B. (CNBC)

• Tesla shares plunge 8% as European sales drop 45%, competition rises, and Musk’s political stance sparks controversy. (YF)

• Europe’s Big Tech Firms outperformed earnings expectations as AI drives growth. ASML and SAP lead the growth, but tariffs and weak EV demand pose risks. (BBG)

• Starbucks is planning to lay off 1,100 corporate employees as CEO Brian Niccol restructures for efficiency amid sales challenges. (AP)

• Denny’s adds temporary egg surcharge amid nationwide shortage as a bird flu epidemic drives egg prices higher. (CNN)

• UnitedHealth faces a Medicare fraud probe, employee buyouts, layoffs, cyberattack fallout, and a public feud with billionaire investor Bill Ackman. The stock plunged 23% in the past 3 months. (CNBC)

AI M&A and Fundraising news (Feb 21 — Feb 27)

• Achira: AI simulation models for drug discovery, raised a $33M Seed.

• Adfin: AI-powered unified payment platform, raised a $8.33M Seed.

• Albert: AI-driven data platform for material R&D, raised a $20M Series A.

• Albert Invent: AI chemistry startup, raised $20M.

• Arsenale Bioyards: AI-driven biomanufacturing optimization startup, raised $10M.

• Auditoria.AI: Agentic AI provider for CFOs, raised a $38M Series B.

• Bridgetown Research: AI due diligence AI startup, raised a $19M Series A.

• Charta: AI-powered automated pre-bill review platform for physicians, raised a $8.1M Seed.

• CircNova: AI-powered RNA-focused biotech, raised a $3.3M Seed.

• Dealcar: AI-driven dealer management software, raised a $3.12M Seed.

• FilterLabs.AI: AI-powered alternative data automation, raised a $3.25M Seed.

• Footprints AI: AI-powered retail media platform, raised a $2.39M Seed.

• Henry AI: AI marketing platform for real estate brokers, raised a $4.3M Seed.

• Infinity Ground: AI-powered video game foundation model, raised a $2M Seed.

• Infimind: AI-driven retail technology solutions, raised a $13.79M Series B.

• Journify: AI-powered customer data platform, raised a $4M Seed.

• Karomia: AI-driven sustainability reporting automation, raised a $2M Seed.

• Lockchain: AI-based security risk engine for Web3, raised a $5M Series A.

• Lovable: Developer of an "AI fullstack engineer," raised $15M Pre-Series A.

• MainFunc: AI-powered search engine platform, raised a $100M Series A.

• Medly AI: AI-powered tutoring and exam paper generation, raised a $1.8M Seed.

• Musubi: AI-driven content moderation tools, raised a $5M Seed.

• Nomagic: AI-driven robotic systems for warehouse automation, raised a $45.8M Series B.

• Onetab.ai: Workplace SaaS for software development, raised a $3.3M Seed.

• Patlytics: AI-powered patent workflow platform, raised a $14M Series A.

• Perfect: Agentic AI platform for recruitment, raised a $23M Seed.

• Portola: AI virtual companion for emotional support, raised a $10M Seed.

• Revvo: AI-powered vehicle tires management platform, raised a $12M Series A.

• Rune Technologies: AI-powered defense technology platform, raised a $6.2M Seed.

• Sonar: AI-based digital health technology, raised a $2.4M Seed.

• Sparta: AI-powered trading insights for data-driven decision-making, raised a $42M Series B.

• Spiky.AI: AI-driven online learning analysis platform, raised a $2.8M Seed.

• Splose: AI-driven practice management software for healthcare, raised a $5M Seed.

• Tandem: AI-powered veterinary care services, raised a $10M Seed.

• Tendif: AI-driven tender management platform, raised a $2M Seed.

• TTI: AI-powered patient-reported outcome application, raised a $4.5M Seed.

• Uniti AI: AI-driven sales assistant platform, raised a $3.6M Seed.

• Valiot: AI and IoT software for manufacturing, raised a $3.4M Seed.

• WilsonAI: AI legal assistant, raised a $1.7M Pre-Seed.

• zypl.ai: AI-powered generative analytics for fintech and telecom, raised a $3M Seed.