May 23rd Newsletter

Author

Da Yu
May 23, 2025

As of close on May 22, 2025

U.S. fiscal worries escalated as the 30-year Treasury yield rose above 5% and Trump’s proposed $3.8 trillion tax-and-spend bill passed the House. This follows Moody’s downgrading the U.S. credit rating from Aaa to Aa1, citing rising debt risks. Also, April producer prices fell 0.5%, the sharpest drop in five years, as companies absorbed tariff costs. Point72 founder Steve Cohen now projects a 45% chance of the U.S. market entering a recession. Despite market pressure, retail investors bought $4.1 billion in equities on Monday, stabilizing stocks. Qatar pledged $500 billion in U.S. investments over the next decade, focusing on AI, data centers, and healthcare. President Trump is also pushing Apple to shift iPhone production from India to the U.S., raising supply chain concerns. In business, Charter and Cox agreed to a $34.5 billion merger.. Crypto giant Circle filed for an IPO, but is in talks with Coinbase and Ripple on a possible sale. In tech, Nvidia CEO Jensen Huang said U.S. chip export controls failed, accelerating China’s AI development and hurting sales. For consumers, Walmart warned it will raise prices due to tariffs, and Trump threatened Walmart, asking it not to pass tariffs onto consumers.

Top 5 AI Highlights

[1] 🎤 Google I/O 2025, the company’s annual developer conference, was a full-on showcase of its AI ambitions. The new AI Mode in Search, powered by Gemini, is rolling out across the U.S., with chart generation and AI shopping features coming soon. Imagen 4 and Veo 3 bring major upgrades to image and video creation, while Flow, a new AI filmmaking app, made its debut. Google also introduced smarter Gmail replies, real-time meet translations, Stitch for UI design, XR smart glasses, and a $250/month AI Ultra plan. Details from The Verge.

[2] 📱OpenAI is acquiring io, the AI hardware startup cofounded by Sam Altman and Jony Ive, in a $6.5 billion all-stock deal. Additionally, LoveFrom, Ive’s independent design firm, will now lead creative direction at OpenAI as part of the deal. Io’s 55-person team, including many former Apple engineers, will focus on developing AI-powered consumer devices. Ive will also help shape future versions of ChatGPT and related products. OpenAI plans to ship out 100 million AI “companion” devices upon launch. More on TC and CT.

[3] 💻 OpenAI has launched Codex, a new AI coding agent in ChatGPT, powered by the Codex model optimized for software tasks. It writes cleaner code, runs tests automatically, and integrates with GitHub to access code repositories. Codex handles debugging, feature creation, and codebase questions. It's now available to Pro, Team, and Enterprise users. The launch follows OpenAI’s $3 billion acquisition of Windsurf, a leading AI coding platform, underscoring its push into tools for developers. See more from TC. 

[4] 🏦 Anthropic secured a $2.5 billion revolving credit line from top banks as its valuation climbed to $61.5 billion and annualized revenue doubled to $2 billion in the first quarter. The Amazon-backed firm also unveiled its most powerful AI models to date, Claude Opus 4 and Sonnet 4, which can autonomously work for seven hours, and are being called the best coding models in the world. Meanwhile, JPMorgan is lending over $7 billion to fund OpenAI’s new Texas data center, part of its $500 billion Stargate initiative with Oracle and SoftBank. More from CNBC (revolver), CNBC (model), and The Information.

[5] 🤖 Startup Firecrawl is offering up to $1 million to hire three AI agents as full-time employees focused on content creation, customer support, and software development. Each agent will be paid $5,000 per month and expected to work independently by posting content, resolving support tickets, or writing code. The Y Combinator-backed company will also employ human “agent operators” to manage and build these bots. While the ideal AI agents do not yet exist, Firecrawl aims to pioneer a future where engineers lead teams of fully autonomous digital workers. More from TC.

Founder’s Corner

Net headcount at startups is in a deep freeze

Source: X

What We Read This Week

  • JPMorgan began allowing clients to buy bitcoin, despite CEO Jamie Dimon's continued public skepticism toward crypto. More from CNBC. 

  • Microsoft accidentally revealed Walmart's confidential AI rollout plans during a disrupted Build conference security session. More from CNBC.

  • Amazon CEO Andy Jassy said tariffs hadn’t impacted consumer demand or pricing during the company’s annual meeting. More from CNBC.

  • Klarna’s Q1 net loss more than doubled to $99 million as U.S. consumer loan defaults surged 17% to $136 million. More from FT.

  • AT&T agreed to buy Lumen’s Mass Market Fiber Business for $5.75 billion, adding 1 million subscribers across 11 states. More from WSJ.

  • Regeneron acquired 23andMe for $256M, also acquiring its 15 million customers’ genetic and personal data. More from TC. 

  • Nike returned to selling directly on Amazon after five years, aiming to revive sales and expand digital reach. More from WSJ.

AI M&A and Fundraising news (May 16 — May 22)

  • Akeno: AI-powered production planning, raised a $5M Seed.

  • Algoma: AI platform for real estate site analysis, raised a $2.3M Seed

  • Anthropic: LLM developer, secured a $2.5B loan

  • AskElephant: AI automation for support and sales teams, raised a $6M Seed.

  • Barndoor AI: Control plane for autonomous AI agents, raised a $13.6M Seed.

  • Biostate AI: Predicts patient treatment responses with AI, raised a $12M Series A.

  • Cartwheel: AI tools for generating 3D animations, raised $10M.

  • Catena Labs: Financial institution for AI agents, raised $18M.

  • Cognichip: AI foundation model for chip design, raised a $33M Seed.

  • Coworker: Enterprise search agent, raised a $13M Seed.

  • Doji: Virtual fashion try-on app, raised a $14M Seed.

  • Filed: AI-powered tax filing automation, raised a $15M Seed.

  • Gravitee: Software for API and AI event stream management, raised a $60M Series C

  • Greenlite AI: AI fraud detection for financial institutions, raised a $15M Series A.

  • Io: AI hardware device, acquired by OpenAI for $5.6 billion

  • Legora: AI document assistant for legal professionals, raised a $80M Series B.

  • LM Arena: AI model benchmarking platform, raised a $100M Seed.

  • Ontik: AI tools for B2B credit risk assessment, raised a $3.7M Seed

  • OpenAI: LLM developer, is lending $7B from JP Morgan for the Stargate Project

  • OroraTech: Wildfire detection intelligence, raised a $41M Series B.

  • Pathos: AI-powered oncology drug development, raised a $365M Series D.

  • Pay-i: Generative AI ROI intelligence platform, raised a $4.9M Seed

  • Rad AI: Generative AI for radiology workflows, raised $8M

  • Ravical: AI agents for professional service workflows, raised $8.3M Preseed

  • Siro: AI sales coaching from in-person conversation analysis, raised a $50M Series B.

  • Theo Ai: AI legal settlement estimation, raised a $4.2M Seed.

  • ThriveAI: AI junior product manager for dev teams, raised $1.2M Preseed

  • TrustCloud: AI risk and compliance workflow platform, raised $15M.

  • Veesion: AI theft detection via video analysis, raised a $43M Series B.

  • Yoodli: AI roleplay coach for sales and interviews, raised a $13.7M Series A.

  • Zoca: AI-powered marketing team for local services, raised a $6M Seed.