A Split-Screen of the Routine & the Ominously Momentous
Plus, Humane gets a soft landing at HP
The Main Item
Major New Entrant Heats Up AI Race Even As Trump & Musk Shadow Everything
Like all Americans who pay attention to public affairs, we struggled this week with a split-screen of news, and it was particularly disorienting since we pay close attention to the tech industry and Elon Musk for a living.
On one side of the screen, we had our regular world of business and venture capital news, topped as it has so often been recently by extraordinarily ambitious AI plays.
Former OpenAI CTO Mira Murati, who replaced Sam Altman as CEO during his brief ouster and later quit herself, on Tuesday said that she’d recruited 30 engineers — 20 from her former employer — for her new startup, Thinking Machines Lab. The announcement was light on details, but Murati’s reputation has gone far in vaulting the start-up to the front of the AI race, at least when it comes to expectations.
Meanwhile Murati’s former OpenAI colleague Ilya Sutskever is also playing the great-expectations game, reportedly valuing his new startup, Safe Superintellience, at $30 billion as he seeks to raise another $1 billion in capital. Another competitor, Musk’s xAI, was reported to be courting investors for a cool $10 billion. X itself is in the funding market too.
On the other side of the screen, Musk was speaking incoherently, marching around with a chainsaw, blitzing his platform with disinformation, interfering in foreign elections, and seemingly moving X to a business model based on extortion. President Donald Trump was delivering on his promise to turn the Justice Department into his personal tort litigation firm, bent on extracting financial and political settlements from criminal and civil defendants, and weaponizing the DOJ, FBI, FCC, and FTC against his critics.
On one side of the screen, there’s routine news such as Hewlett-Packard buying a one-time darling for parts — in this case Humane, maker of a not-great AI pin. (More on that below.)
On the other side of the screen, there’s Trump denouncing Ukraine’s President Volodymyr Zelenskyy as a dictator, blaming him for starting the war with Russia, ramping up his attacks on NATO and other allies and continuing to tout territorial expansion, all while praising Vladimir Putin and ordering sweeping cuts at the Pentagon.
On one side, we watch the spread of bird flu. On the other, we see the nation’s once world-leading public health system and biomedical research institutions being ravaged.
Here in San Francisco, on one side of the screen we have our new Mayor, Daniel Lurie, grappling with a huge budget deficit and a fresh uptick in overdose deaths. On the other side, we have Trump ordering the dissolution of the Presidio Trust, with the apparent intention of selling the one-time Army base, now a magnificent park on an unmatched spit of coastline, to real estate developers.
On one side, life goes on. On the other side, Trump muses about an unconstitutional third term, or maybe king for life.
We don’t think this is going to end well. We’re not sure what our Trump-supporting friends in the VC community are thinking.
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One Big Chart
Pre-Seed Funding Fell at the End of 2024
Venture funding at the earliest stages of a startup’s lifespan had proven relatively resilient throughout the most recent downturn, but that trend is no longer holding, according to fresh data from Carta.
The boom times saw multistage funds increasingly dipping their toes into seed and even pre-seed investing, but this trend has reversed. Investors are clamoring to get into just a few large, growth-stage deals that they see as clear winners.
Carta’s latest report on the State of Pre-Seed investing in 2024 shows that pre-seed funding dropped significantly in Q4 of last year, down to $716 million across 5,382 deals. At the same time, growth stage investing picked up significantly — the value of Series D deals increased by 78.8%, per Carta.
