May 9th Newsletter

Author

Da Yu
May 09, 2025

As of close on May 8, 2025

The U.S. and the U.K. have agreed on a “breakthrough” trade deal since the U.S. announced global tariffs. The Federal Reserve held rates steady, as Chair Jerome Powell cautioned that future moves depend on evolving tariffs, while highlighting growing risks of inflation and unemployment. In tech, Amazon changed its pay structure to favor employees with consistent top ratings while cutting rewards for others. Additionally, in its restructuring, OpenAI aims to cut Microsoft’s revenue share from 20% to 10% by 2030 and to renegotiate IP rights. Also, OpenAI has reached an agreement to acquire AI coding tool Windsurf for $3 billion, after Anysphere turned down offers previously, and has recently raised $900M with $200M ARR. In M&A, Doordash agreed to acquire Deliveroo, the British food delivery company, for $3.9 billion. It is also acquiring Seven Rooms, a New York-based software company that helps hotels and restaurants handle bookings and promotions for $1.2 billion. Lastly, Cardinal Robert Francis Prevost was elected on Thursday as the first American pope. 

Top 5 AI Highlights

[1] 🔄 OpenAI has dropped its plans to become a full for-profit public-benefit corporation. Instead, only its for-profit arm will adopt that status under nonprofit control, preserving the board’s duty “to humanity.” The shift still unlocks $30B in SoftBank-linked funding. Elon Musk called it “cosmetic,” while CEO Sam Altman said it simplifies the structure and aligns with OpenAI’s mission. Instacart CEO Fidki Simo will join OpenAI as "CEO of applications" later this year. She will remain the CEO of Instacart and continue as its Chair after stepping down from the day-to-day role. Meanwhile, OpenAI CEO Altman will concentrate on research, compute, and safety. More from TC and WSJ.

[2] 🔍 Apple is seeking to add AI-powered search to Safari, risking its $20B/year deal with Google. Apple SVP Eddy Cue said OpenAI, Perplexity, and Anthropic could rival traditional engines, but need refinement. Safari search volume fell last month as users turned to AI tools. Cue’s announcement contributed to a 9.4% drop in Alphabet’s stock and a 2.7% drop in Apple’s stock on Wednesday. Meanwhile, Anthropic launched a web search API for its Claude models to provide real-time, accurate information, intensifying competition in the search space. More from Bloomberg and TC.

[3] 💻 The Trump administration plans to rescind the “AI diffusion” rule, a set of Biden-era export restrictions on advanced AI chips scheduled to take effect May 15. The rule would limit exports from companies like Nvidia, AMD, and Intel by dividing countries into restrictive tiers. Nvidia CEO Jensen Huang recently warned that being cut off from China’s AI market would be a devastating blow, both financially and strategically. Nvidia shares rose on the news, as the reversal could reopen a key growth engine for U.S. chipmakers. More from CNBC.

[4] 📺 Figma and Netflix are adopting AI to enhance user experience and competitiveness. At Config 2025, Figma launched Sites, Make, Buzz, and Draw—tools aimed at replacing platforms like WordPress and Adobe, with Claude 3.7 powering AI coding in Make. Netflix unveiled a redesigned homepage with a vertical video feed and OpenAI-powered search, offering real-time, mood-based recommendations trained by its in-house team. More from The Verge and CNBC

[5] 🧑‍💻AWS is building “Kiro,” an AI tool that generates code in real time using prompts and existing data. It supports multimodal input, integrates with third-party AI agents, and includes web and desktop apps. Kiro can also draft docs, flag issues, and optimize code. While AWS already offers Q Developer, Kiro marks a stronger push into the growing AI coding market, where rivals like Anysphere and Windsurf exceed billion-dollar valuations. More from Business Insider and TC.

Founder’s Corner

Valuation is near 2021 peak levels, but the activity level is way below

Source: X

What We Read This Week

  • Banks maintain high credit card rates despite CFPB rule reversal, citing stability and partner alignment. (CNBC)

  • 3G Capital will acquire Skechers in a $9B take-private deal, betting on global sales amid U.S. tariff risks. (CNBC)

  • Bill Gates is committing to giving away $200B of his wealth, planning to wind down his foundation by 2045. (NYT)

  • CrowdStrike is cutting 5% of staff, or ~500 roles, to boost efficiency while reaffirming its full-year outlook. (WSJ)

  • AI no-code mobile app Rork secured $2.8M from a16z after a viral tweet boosted it to $550K ARR. (TC)

AI M&A and Fundraising news (May 2 — May 8)

  • Anysphere (Cursor): AI-powered coding assistant platform, raised $900M.

  • Breathe Battery Technologies: AI tools to extend EV battery life, raised a $21M Series B.

  • Doppel: AI platform for social engineering protection, raised a $35M Series B.

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

  • Fastino: Compact AI models for low-cost GPUs, raised a $17.5M Seed.

  • Hostie: AI for restaurant guest management and revenue, raised a $4M Seed.

  • Inductive Bio: AI drug discovery using protein simulations, raised a $25M Series A.

  • Orca AI: Autonomous AI-powered shipping platform, raised a $72.5M Series B.

  • Ox Security: AI code security scanning & remediation, raised a $60M Series B

  • Pallie AI: AI emotional support companion for stress/anxiety, raised a $2M Pre-Seed.

  • Parloa: Agentic AI for customer experience, raised a $120M Series C.

  • Quantum Systems: VTOL drones with AI aerial intelligence, raised a $180M Series C.

  • Recraft: AI design platform for graphics and visuals, raised a $30M Series B.

  • Relevance AI: Infrastructure to deploy enterprise AI agents, raised a $24M Series B.

  • Rork: AI mobile app development from text prompts, raised a $2.8M Seed.

  • Sett: AI agents to build and run mobile games, raised a $27M Series A.

  • Skillvue: AI for resume screening and candidate matching, raised a $6.3M Seed.

  • StackAI: Tools to deploy AI agents on internal data, raised $16M.

  • Toloka: Crowd-sourced AI data labeling and correction, raised $72M.

  • Trek Health: AI for healthcare contract negotiation, raised a $11M Series A.

  • Unblocked: AI to help developers understand codebases, raised $20M.

  • WisdomAI: Tools to reduce hallucinations in LLMs, raised a $23M Seed.