October 3rd Newsletter

This week, Fed Chair Powell signals two potential 25 basis point cuts. Surprisingly, job openings surged to 8.04 million in August, a three-month high, as ADP reports show U.S. private sector jobs grew by 143,000 last month, reversing a five-month slowdown trend. Latest from this morning, Hiring in September was robust, US Employers added 254,000 jobs and the unemployment rate fell to 4.1%. Oil prices surged this week after President Biden suggested that U.S. officials are discussing support for an Israeli strike on Iranian oil facilities, raising concerns of a broader Middle East conflict. Boeing considers raising $10 billion through new share issuance amid factory strikes. Dockworkers strike at major East and Gulf Coast ports for the first time in 50 years, risking $5 billion in daily economic damage, affecting 60% of US shipping, and increasing freight costs by 20%, finally ended Thursday afternoon. Former President Jimmy Carter celebrates his 100th birthday, defying expectations after 19 months in hospice care. In corporate news, private equity giant KKR is eyeing a major acquisition of the $5B semiconductor company ASMPT. Charles Schwab CEO Walt Bettinger announces to retire by the end of 2024. CVS Health is cutting 2,900 jobs, amid alleged considerations of a breakup. We will have our earnings calendar starting next week when the major banks kick off the Q3 earnings season next Friday.

Top 5 AI highlights

[1] 🚀 OpenAI secured $6.6B at a $157B valuation, with Thrive Capital leading a $1.25B investment with the option to invest another $1B at the current valuation next year if OpenAI reaches specific milestones. Projecting $11.6B in revenue by 2025, OpenAI faces internal tension between profit goals and public mission. OpenAI also launched Realtime API with context for fast, multimodal AI voice apps along with other features from OpenAI DevDay 2024. More on Reuters, FT, and OpenAI.

[2]🧠Poolside, an AI-powered software platform, raised $500 million in a Series B round led by Bain, with support from like eBay and Nvidia, valuing the company at $3 billion. Founded by former GitHub CTO Jason Warner and Eiso Kant, Poolside’s new funding will go towards improving their tech and expanding its reach. Details on TC. 

[3] 💻 AI chipmaker Cerebras Systems filed for Nasdaq IPO as "CBRS". Competing with Nvidia, it reported a $66.6M net loss on $136.4M in sales in H1 2024. Key customer G42 committed $1.43B in purchases by 2025. This move highlights the growing competition and investment in AI chip manufacturing. Read on CNBC and Jay’s take on X here.

[4] 📜 Governor Gavin Newsom vetoed California's AI bill SB 1047, citing concerns about regulation based on model size rather than function. However, he signed AB 2013, which mandates algorithmic transparency for generative AI. These decisions reflect the ongoing debate about balancing innovation and regulation in the AI industry (CA GOV).

[5]🤖 Microsoft’s finance leases for data centers have jumped to $108.4 billion, an increase of almost $100 billion in two years. The leases will start between 2025 and 2030, spreading payments over time, which may affect profits. Last quarter, Microsoft also spent $19 billion to boost its AI infrastructure, including a deal to restart the Three Mile Island nuclear plant. (CNBC)

WordPress Drama

WordPress co-founder Matt Mullenweg and hosting provider WP Engine are embroiled in a legal dispute over trademark usage and community contributions. Mullenweg temporarily banned WP Engine from WordPress.org resources, disrupting website updates. WP Engine has now sued Automattic and Mullenweg, alleging extortion and abuse of power. The conflict highlights tensions in open-source governance especially as we see the constant debate around open-source or close-souced LLMs in the AI world. Details below:

Founder’s Corner

Marc Andreessen’s Hiring Advice

What we read and listened to this week

• The U.S. needs 200 new nuclear plants by 2050 to triple nuclear power; the Three Mile Island restart marks initial progress. (CNBC).

• AI podcasters are shocked to find out they’re not humans (X).

• Bill Ackman, the combative activist investor, released his "Buy, Sell, Hold" slide deck on Harvard (PSF).

• The Social Radar: Tony Xu, Founder & CEO of Doordash (link).

• CRV returns $275M to investors, signaling recalibration in venture capital amid changing conditions (NYT).

• AT&T sells its 70% DirecTV stake to TPG, for approximately $7.6 billion in cash payments through 2029 (YF).

AI M&A and Fundraising news

October 3:

• Ameba: AI-powered tools for managing supply chains, raised a $7M Seed round.

• Avarra: AI-based avatar sales training, raised a $8M Seed round.

• Crescendo: a conversational AI platform for customer service, raised a $50M round.

• Harmonic Security: an AI-powered platform to protect sensitive data, raised a $17.5M Series A round.

• Integrated Biosciences: developing drugs for age-related diseases using synthetic biology and AI, raised a $17.2M Seed round.

• Kapa.ai: Advanced Technical AI Assistants, raised a $3.2M Seed round.

• Lorikeet: AI agent for customer support, raised a $5M Seed round.

• OpenAI: a frontier AI research, raised a $6.6B round.

• Sort a Brick: an AI for cleaning, sorting, and repurposing old LEGO bricks, raised a $1.3M round.

• Voyage AI: Search and retrieval for unstructured data, raised a $20M Series A round.

October 2:

• AirOps: AI-powered Content Marketing, raised a $15.5M Series A round.

• Augmodo: a Seattle startup making wearable devices for retail employees, raised a $5.3M Seed round.

• Billables AI: an SF-based timekeeping solution, raised a $3.9M Seed round.

• iAsk: an AI search engine platform, raised a $4.2M Seed round.

• MarqVision: AI-powered software for brands to protect IP by detecting and removing counterfeit goods, raised a $16M Series A extension.

• Pallet: AI in logistics operations, raised an $18M Series A round.

• Poolside: the company building the world's most capable AI for software development, raised a $500M Series B round.

• Reducto: an AI document processing, raised an $8.4M Seed round.

• Vizit: a visual AI platform for e-commerce, raised a $25M Series B round.

October 1:

• Dexory: an AI-powered warehouse intelligence platform, raised an $80M Series B round.

• DocJuris: an AI-powered contract negotiation platform, raised an $8M Series A round.

• Formality: an AI-powered contract management platform, raised an $8.8M round.

• Lanai AI: an enterprise AI enablement platform, raised a $10M Seed round.

• Numa: a provider of AI chatbots for auto dealers, raised a $32M Series B round.

• Resolve AI: an AI production engineer platform, raised a $35M Seed round.

• Rogo: a generative AI startup focused on financial services, raised an $18.5M Series A round.

• Runware: Building specialized hardware and optimizing software to speed up AI tasks, raised a $3M round.

• Thread AI: a composable AI infrastructure platform, raised a $6M Seed round.

• Wispr: an AI-powered voice dictation program, raised a $12M round.

September 30:

• Artisan: an AI employee platform for GTM teams, raised a $11.5M Seed round.

• Briink: an AI platform for ESG audit and verification, raised a $4.2M Seed round.

• HPC-AI Tech: video generation AI and GPU platforms, raised a $50M round.

• Loti AI: an AI-powered business automation and optimization tools company, raised a $6.65M Seed round.

• Qodo: an AI company for code generation and testing, raised a $40M Series A.

• Series: a GenAI game development platform, raised a $28M Series A.

• 11x AI: a developer of AI sales reps, raised a $50M Series B round.

September 29:

• Mindpeak: an AI-powered digital pathology company, raised a $15.3M Series A.

• Syte: an AI-driven real estate data platform, raised a $5.3M Seed round.

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.