May 2nd Newsletter

Author

Da Yu
May 02, 2025

As of close on May 1, 2025

Economic momentum slowed this week as Q1 GDP decreased at a 0.3% annualized rate, dropping from 2.4% in Q4 2024, while job openings declined to 7.19 million, down from 7.48 million in February. Consumer confidence also fell sharply, with the Conference Board’s index dropping 7.9 points to 86, its lowest level in nearly five years. Markets briefly rose due to softer inflation data but still ended lower in April, with the S&P 500 posting its third straight monthly loss. Additionally, the White House criticized Amazon's plan to display tariff costs at checkout. In tech, IBM announced a $150 billion investment in U.S. operations, including $30 billion for quantum and mainframe research. Also, Intel is rolling out a new push to compete with Nvidia, focusing on in-house chip development for AI, robotics, and edge computing. Lastly, Google CEO Sundar Pichai rejected the Justice Department’s proposal to force the sale of Chrome and share search data, warning it would harm privacy and allow rivals to copy its search engine.

Top 5 AI Highlights

[1] 🛡️ Palo Alto Networks announced its plan to acquire Protect AI at RSA Conference 2025, in a deal valued between $650 million and $700 million. The acquisition will strengthen Palo Alto’s Prisma AIRS platform, which offers end-to-end security across the AI development lifecycle, including model scanning, risk assessment, and runtime protection. This move highlights Palo Alto Networks’ focus on securing the expanding AI attack surface and will reinforce its position as a leader in AI-driven cybersecurity. Read the Press Release and CNBC.

[2] 💳 Visa and Mastercard are launching AI-driven payment platforms to power the next phase of commerce. Visa's Intelligent Commerce lets AI agents shop and pay using tokenized AI-Ready Cards, with support from partners like OpenAI and Stripe. Mastercard’s Agent Pay uses Agentic Tokens to enable secure, conversational payments through platforms like Microsoft Copilot. Both aim to deliver smarter, safer, and more personalized transactions. More from Mastercard and Business Wire. 

[3] 🛍️ OpenAI rolled back a recent GPT-4o update after users flagged overly flattering responses. The company is testing fixes to improve balance, transparency, and long-term user satisfaction, while giving users more control through real-time feedback and customizable personalities. GPT-4o now also offers shopping tools with product recommendations, images, reviews, and purchase links across fashion, beauty, home, and electronics, with memory-based personalization coming soon. More from TC, Reuters, and Open AI.

[4] 🌐 Chinese AI startup Manus has raised $75 million at a $500 million valuation in a round led by Benchmark, signaling a shift in the global AI race. Manus builds task-performing AI agents and recently launched a general-purpose model with paid plans. Benchmark’s rare backing of a Chinese company reflects growing confidence in China’s AI capabilities. With expansion planned in the US, Japan, and the Middle East, global competition is intensifying. The deal raises geopolitical stakes as nations compete for leadership in frontier AI development. More from TC.

[5] 🤖 Duolingo CEO Luis von Ahn said the company will become AI-first, replacing contract work with AI for hiring and content creation, launching 148 AI-generated courses. Yelp is also using AI voice agents from OpenAI to manage restaurant calls and tasks with no custom setup. Wikipedia will use AI to support, not replace, volunteer editors by streamlining workflows, improving translations, and enhancing content discoverability while maintaining a human-centered approach. More from The Verge (Duolingo), TC (Yelp), and TC (Wikipedia).

Founder’s Corner

Pre-money Valuation for U.S. Startups in the Last Two Quarters

Source: X

Big Tech Q1 Earnings

  • Amazon reported $155.7B in revenue, +9% YoY growth, and AWS revenue was up 17% YoY, yet stocks slid 2% after hours due to mixed guidance. (IBD)

  • Apple reported $95.4B in revenue, +5% YoY growth, and announced a $100B buyback program. (YF)

  • Meta reported $42.3B in revenue, +16% YoY growth. Meta now has nearly 1B MAUs and reported its Llama AI models have been downloaded over 1.2B times. (YF)

  • Microsoft reported $70.1B in revenue, +13% YoY growth, and shares rose 7% after hours with stronger-than-expected quarterly growth. (CNBC)

What We Read This Week

  • Thinking Machines Lab is raising $2B at a $10B valuation, while CEO Mira Murati gets an unusual outsized board and voting control. (The Information)

  • Hugging Face has launched the SO-101, a $100 AI-trainable robotic arm, expanding its robotics push via its recent acquisition of Pollen Robotics. (TC)

  • Startups Validia and Proctaroo claim they can detect viral AI cheating app Cluely, which is now also eyeing hardware tools. (TC)

  • Amazon will invest $4B by 2026 to expand rural delivery and triple its station network. (CNBC)

  • UPS will cut 20,000 jobs and close 73 facilities in 2025, citing Amazon's pullback and economic uncertainty. (Bloomberg)

  • DoorDash proposed a $3.6B cash acquisition of Deliveroo, seeking expansion into UK and European markets. (MSN)

  • American Airlines is suing JetBlue to recover unpaid funds after failed talks to revive their Northeast Alliance. (WSJ)

AI M&A and Fundraising news (Apr 25 — May 1)

  • ARX Robotics: Autonomous unmanned ground systems in the EU, raised a $35M Series A.

  • Axiom: Drug toxicity testing platform using AI, raised $15M Seed.

  • Basil Systems: AI for regulatory and clinical insights, raised $11.5M.

  • Blooming Health: AI platform connecting older adults to care, raised a $26M Series A.

  • Cheehoo: AI animation platform for creators and studios, raised $10M.

  • Craif: AI-based urine biomarker cancer detection, raised a $22M Series C.

  • Dex: AI CRM for recruiters and sales professionals, raised $3.1M Pre-Seed.

  • EdgeRunner AI: On-device AI agents for defense and enterprise, raised a $12M Series A.

  • Emmi AI: Real-time simulations for industrial engineering, raised $17M Seed.

  • Faye: AI financial and estate planning for families, raised $2.5M Pre-Seed.

  • Field Materials: AI to automate construction procurement, raised a $10.5M Series A.

  • Glacier: AI-powered recycling robotics systems, raised a $16M Series A.

  • Gruve: AI-powered IT & tech consultancy for enterprises, raised $37.5M Seed.

  • Kintsugi: AI-enabled sales tax compliance platform, raised $18M.

  • Lightrun: AI-powered code observability and remediation, raised a $70M Series B.

  • P-1 AI: Foundational AI models for industrial simulations, raised a $23M Seed.

  • Pallie AI: AI friend to improve well-being, raised $2M Pre-Seed.

  • Particula: AI risk analytics for digital assets, raised $5.5M.

  • Plenful: AI workflow automation platform for healthcare, raised a $50M Series B.

  • Rogo: AI analyst chatbot for investment banking, raised a $50M Series B.

  • Sennos: AI fluidics and fermentation optimization tools, raised $15M.

  • Structify: AI data preparation platform, raised a $4.1M Seed.

  • Supio: Legal AI platform for personal injury firms, raised a $60M Series B.

  • Utilidata: AI GPU-embedded meter for edge AI, raised a $60.3M Series C.

  • VSORA: High-performance AI inference chips, raised $45.5M.