October 11 Newsletter

Before we begin, we hope our friends in Florida stay strong. Live update of Hurricane Milton here. Reuters reports that damages could cost insurers over $100B. This week, the 10-year US Treasury yield climbed back to 4% following strong economic indicators. The U.S. added 254,000 jobs in September, reducing unemployment to 4.1% while maintaining steady wage growth. Investors now expect a more robust economy than what the Federal Reserve anticipated, potentially delaying expected interest rate cuts. Yesterday, CPI rose 2.4% YoY but was below the 2.5% YoY in August. Meanwhile, oil prices spiked 13% over 11 days but dropped on Tuesday as anticipated tensions between Israel and Iran did not escalate. TD Bank agreed to more than $3B in fines and US growth restrictions. In Big Tech, industry giants like Amazon and Microsoft turn to nuclear power for their data centers, signing with U.S. nuclear plants to meet climate goals. In other news, 14 state attorneys general sued TikTok, alleging harm to minors' mental health and illegal data collection, and Tesla unveiled its anticipated Robotaxi. We have our earnings calendar in the attached deck as the major banks kick off the Q3 earnings season today.

Top 5 AI highlights

[1] 🏅Geoffrey Hinton and John Hopfield win the Nobel Prize in Physics for pioneering work on machine learning. Hinton, often called the "Godfather of AI," developed neural networks crucial for AI systems. Hopfield's network innovations allow computers to recreate patterns from incomplete data. Google DeepMind’s Demis Hassabis, and John Jumper won the Nobel Prize in Chemistry for using AI to solve protein structures. Full details from BBC and CNN.

[2] 🔍Kobold Metals, an AI-driven mineral exploration startup, raised $491M of a targeted $527M round. Backed by Bill Gates, Jack Ma, Jeff Bezos, and firms like Andreessen Horowitz, Kobold aims for a $2B valuation. Their recent discovery of a massive copper deposit in Zambia underscores their rapid growth. Full details on Pitchbook.

[3] 💻OpenAI, after raising $6.6B, is reducing reliance on Microsoft’s data centers. Concerns over insufficient computing power prompted a deal with Oracle to lease one of the largest data centers in Texas, hosting hundreds of thousands of Nvidia chips. OpenAI aims to stay competitive against rivals like Elon Musk’s xAI. However, recent financial documents show that its annual losses could reach $14B in 2026, almost triple the loss projected in 2024. Full details on The Information and CNBC.

[4] 💾 AMD CEO Lisa Su has revised the projected global AI chip market value to over $500 billion by 2028, up 25% from the previous $400 billion forecast. This new target, starting from a $45 billion market in 2023, necessitates an approximate 60% year-over-year growth for five consecutive years to be achieved. Read more here.

[5] 💰 Nvidia's CEO Jensen Huang announced that the company's latest chip, Blackwell, unveiled earlier this year, is sold out for the next 12 months. Notably, Huang holds the record for being the longest-serving founder CEO of a publicly traded company. Details here.

Founder’s Corner

North Star Metric

The North Star Metric (NSM) is a single metric that captures the core value your product delivers to customers, driving sustainable, long-term growth. Examples below.

What we read and listened to this week

• DOJ considers breaking up Google’s search monopoly, and curbing default agreements and distribution control (CNBC).

• A U.S. judge allows the FTC's antitrust case against Amazon to proceed while dismissing some claims from other states (Reuters).

• 23andMe's DNA data from 15 million customers remains protected, but future use is uncertain amid the company's financial struggles (NPR).

• FTX gains court approval to fully repay customers, earning a 119% profit; as shareholders may receive a portion of $1 billion in seized assets (Bloomberg).

• Uber launches $18 shuttle rides to LaGuardia from three Manhattan spots, with $9 first-month discounts (WSJ).

• Amazon will expand its pharmacy network in 2025, offering same-day prescription delivery to nearly 45% of U.S. residents. This comes as competitors like Walgreens and CVS close stores (USA Today)

AI M&A and Fundraising news

October 10:

• ApertureData: a startup focused on multimodal AI databases, raised a $8.25M Seed round. 

• Noetica AI: a platform for benchmarking deal terms, raised a $22M Series A round.

• Reylance AI: an AI data governance platform, raised a $32M Series B round.

October 9:

• Basecamp Research: an AI focused on biological research, raised a $60M Series B round. 

• Cove: AI-powered collaboration board, raised a $6M Seed round.

• Drawer AI: AI-powered estimating system in construction, raised a $5M seed round.

• Levy Health: an AI to generate personalized fertility reports, raised a $4.5M Seed round. 

• OpenGradient: a platform for AI model hosting and application, raises a $8.5M Seed round.

• Prime Security: AI-powered system security for enterprises, raises a $6M Seed round

• Stream Claims: an AI-powered software for medical claims management, raised a $5.3M Seed round. 

• Vultron: an AI for federal government proposals, raises a $4.85M Seed round.

• Wayvee Analytics: customer service rating AI for brick-and-mortar retailers, raises a $5M Pre-Seed round.

October 8:

• Alpha Design AI: AI agents for chip design, raised a $3M Seed round.

• Auger: AI-powered supply chain tools, raised a $100M Seed round.

• BizzyCar: Automated recall management platform, raised a $15M Growth Funding round.

• Braintrust: LLM app development, raised a $36M Series A round.

• Building Radar: AI-driven construction sales platform, raised a $7.2M round.

• Centaur Labs, AI-driven data labeling services, raised a $16M Series B round.

• Corvus Robotics: Autonomous drones for inventory management, raised an $18M Series A round.

• Driver: AI for technical documentation, raised an $8M Seed round.

• EvenUp: AI tools for personal injury law firms, raised a $135M Series D.

• Distributional: an AI testing startup, raised a $19M Series A round.

• Infactory: AI app-building search tool, raised a $4M Seed round.

• Kiva AI, an SF-based provider of data annotation and labeling solutions, raised a $7M Seed round. 

• Lightdash: Open-source business intelligence platform, raised a $11M Series A round.

• TensorWave: Cloud-based AI chip access platform, raised a $43M SAFE Funding round.

• Third Dimension AI: AI-driven 3D game world creation, raised a $7M Seed round.

• Unify: AI-driven outbound message generator, raised a $12M Series A round.

October 7:

• Clout Kitchen: AI gaming pal mimicking content creators, raised $4.45M Seed round.

• Kobold Metals: AI-driven mineral discovery startup, raised $491M of a $527M round.

• Lovable: AI-powered code-writing platform, raised a $7.5M Pre-Seed round.

October 4:

• AEOS: Croatian AI-powered video marketing solutions, raised a $10.9M Series B.

Attached to this email, you’ll find a summary of this week’s highlights and the financial performance of select public companies, providing you with a snapshot of recent market movements.