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WTF Really Happened at OpenAI?
Alpha
November 21, 2023
∆ Tech in the News
EU Power Grab - France, Germany, and Italy agreed on a pro-innovation framework over strict regulation of AI foundation models in the EU's AI Act.
Lift-Off - SpaceX's 2nd Starship orbital test launch self-destructed in space shortly after leaving Earth’s atmosphere, improving on a previous attempt
“AI Ready” - Amazon plans to offer free 'AI Ready' courses to teach AI Skills to 2M people by 2025 as competition with Microsoft heats up.
Thermonuclear Lawsuit - X has sued Media Matters over alleged fraudulent manipulation behind a report which led to many advertisers cancelling ads.
Cutting Deals - The Justice Department offered Binance a $4B deal to resolve their lengthy investigation into the crypto exchange reports Bloomberg.
Who will take OpenAI's place as the leader in AI? |
˚The hottest thing in tech this week
OpenAI Conflict Over Human Benefit vs Commerce
The chips are still falling from Sam Altman’s firing from OpenAI and prompt hiring by Microsoft to lead a new advanced AI research team. There is still much uncertainty and speculation about the fate of the ChatGPT creator and what was really going on behind the scenes, as well as about the likely outcomes.
The board apparently felt Altman was moving too quickly, with too much focus on rapidly deploying consumer products contrary to OpenAI’s non-profit mission of “AGI that benefits of humanity” and widespread concern over safety. There is speculation that there was some conflict behind Sam’s attempts to achieve AGI and his founding of other companies which the board felt contradicted this mission. Altman stated to Congress, that he takes existential risk from AI seriously, but his actions may speak louder than words, with government actors perhaps not buying it, leading to political pressure on the board to rein him in.
The big questions now are, what is the value of OpenAI now that 700/770 employees are likely quitting and many joining Microsoft - their biggest stakeholder with a $10b investment and a sweet deal to use their IP? Where now for investors and the planned secondary market share sale at $80b-$90b? If OpenAI disintegrates, who will take their spot as AI market leader?
“This was the board doing its duty to the mission of the nonprofit, which is to make sure that OpenAI builds AGI that benefits all of humanity.”
News Bytes
Elon Musk confirms “X corp investors will own 25% of xAI”
Meta has disbanded its Responsible AI team
Cruise co-founder and CEO Kyle Vogt resigns
Career Hive
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Deals We’re Watching
Founders to Watch and Opportunities to Catch
Open Deals:
Khosla Ventures - The OpenAI and DoorDash backer is raising 3 funds worth $3B - a $500M seed fund, a $1.6B flagship fund, and a $900M growth fund.
Blue Bear Capital - Nearing $200M for its fund iii focused on “capital light” software & machine intelligence startups in the climate and energy sector.
Female Founders Fund - Raising $75M for its fourth fund with Goldman Sachs, Pivotal, and Plexo as limited partners.
Avra - This New VC firm by an ex-YC lead is raising a $350M fund and running an accelerator for post-Series A startups, including Runway in cohort 1.
Closed Deals:
yPredict - Raised $5M in a presale for its AI-driven crypto analytics, insights and trading tools, with a growing user base and plans for a marketplace.
Route 92 Medical - Landed $31M Series F funds to further its tech to improve stroke patient outcomes with clinical adoption and complete FDA trials.
Falcomm - Semiconductor startup raised a $4M Seed to develop ultra-efficient power amplifiers - a significant advancement in wireless comms tech.
Deep Sky - Startup focusing on carbon removal and storage tech raised $54.7M from venture capital firms and governments to begin a plant in Quebec.
Medmo - A New York startup that helps consumers schedule medical imaging appointments, raised a $9 million round led by Lerer Hippeau
Companies to Watch:
Dwellsy - This rental marketplace app offers 14M+ listings and raised $11.5M backed by UOC and Frontiers Capital, to expand its tailored rental solutions to specific renter needs.
AppFlowy - Secured $6.4M to develop an open-source, end-to-end encrypted Notion rival with strict data privacy. Backers include Matt Mullenweg, Steve Chen.
LucidLink - With 5x ARR Growth and clients like Adobe Shopify, BuzzFeed, and Spotify using its seamless file streaming tech, the startup just raised $75M to expand.
Toku - An AI platform using retina scans to predict heart conditions, just received FDA breakthrough status and plans to offer testing by 2025.
Panoptic - A startup building a decentralized exchange platform for perpetual options, just raised a $7M seed round led by Greenfield Cap.
The Funding Buzz
Coatue Management - Raised a $1.4B companion fund to its $7.7B VC growth fund with no fees for existing growth fund investors.
Menlo Ventures - Uber and Warby Parker backer raised $1.35B to invest heavily in AI startups across a flagship fund, a growth fund, and affiliated funds.
LG Group - The Korean tech giant VC division, LG Technology Ventures opened a new $309M fund to back AI, battery, and mobility startups.
Ballistic Ventures - The cybersecurity-focused VC firm has set a target of $300M for its second fund following a similar-sized fund raised in May 2022.
Tools
Inqwire - Limited Beta App - Facilitate meaningful group discussions with “Natural intelligence”.
Ozone - AI-powered video editor just raised $7M.
Meta - Emu Video AI generates eerily realistic 4-second video clips from text captions.
Simone Giertz - "the queen of shitty robots" now has a crazy new invention — foldable hangers on Kickstarter.
How Did we do this time? |
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The Tech Buzz Team