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The recent dealmaking in Silicon Valley around AI startups is challenging the status quo. Character.AI's $2.5 billion licensing deal with Google has set a new precedent, where founders like Noam Shazeer and Daniel De Freitas walk away with great opportunities, while the rest of the team and investors face uncertainty. This shift highlights a few critical trends: · Talent Wars: Big Tech is increasingly focusing on acquiring top AI talent, rather than just products. As the talent pool for world-class AI engineers remains limited, these acqui-hires are becoming essential strategies for companies like Google, Amazon, and Microsoft. · Changing VC Dynamics: Traditional relationships between VCs and founders are being tested. With deals like this, VCs are rethinking their agreements to ensure they are not left behind when founders exit early. · Antitrust Avoidance: With increased regulatory scrutiny, non-traditional deals offer a way for companies to expand without triggering antitrust concerns. As Cameron Lester of Jefferies pointed out, this is just the beginning. We can expect more of these talent-focused deals as AI continues to dominate the innovation landscape. It's a pivotal time for investors and startups alike to adapt to these new norms. How will this shape the future of AI innovation? Read the full article here: https://lnkd.in/dw6BYSmA #AI #VentureCapital #Startups #Innovation #Leadership #Google #CharacterAI #Amazon #Microsoft

I love this story about our founder and CEO, Dylan Fox, at AssemblyAI. It is so inspiring to see how far our company has come, especially in the 2.5 years I’ve been here. Like Tess mentioned below, our newest Speech AI model outperforms companies Google, AWS, and Azure by 22%! It’s still only just the beginning and I can’t wait to see where we head in the next 5 years! #futuretech #tech #ai #speechai #startup

Google unnerved Silicon Valley last week when it agreed to pay $2.5 billion to license Character.AI's technology, hire its two superstar cofounders and 20 percent of employees. The deal came after AI developers Adept and Inflection both effectively sold themselves to Amazon and Microsoft, respectively, in recent months. "Seeing these acqui hires for companies that have raised so much money so quickly is kind of a shock," said Brent Queener, managing partner at Bonfire Ventures. "These are not normal," added Kyle Sanford, a venture analyst at PitchBook. It was only last year Character.AI raised $150 million in venture funding, which valued the company at $850 million. The app has been a hit, with 3 million downloads last month, ranking it #15 in the Apple app store entertainment category, according to data from SensorTower. But the reality is that the startup's growth has not been blockbuster and revenue is minimal. Its appeal as a chatbot that uses AI to make virtual characters that interact with users seems decidedly niche. The company did not have enough momentum to raise another big round in today's ultracompetive funding environment, according to Iris Sun, an investor at 500 Global. "They seem to be doing pretty well on the surface, but they are not," said Sun. "They only made about $200,000 from the mobile app in July, and the estimated revenue for this year is only around $17 million, so they cannot self-sustain." Most of the founders and investors Business Insider spoke to for this story say Google has little interest in Character.AI's actual product. The real aim is to bring back the company's star cofounders, CEO Noam Shazeer and President Daniel De Freitas, to compete against Microsoft, Amazon, and other Big Tech companies that are seen are further ahead in the AI talent wars. "The dirty little secret with the AI craze is that there is a massive bottleneck in regard to the number of world-class computer scientists and engineers who are positioned to push real boundaries and innovate," said Jack Selby, the head of Peter Thiel's family office and managing partner at AZ-VC. "These people number in the low thousands. Given this scarcity, they are very expensive." https://lnkd.in/eGSv7bSg

Can you believe that Google paid $2.7 billion to rehire an ex-employee? Actually yes, that's true ! Google paid $2.7 billion to rehire Al genius Noam Shazeer, who left after the company refused to release his bot. Shazeer, the co-author of a seminal research paper that ignited the Al boom, left Google in 2021 after the company refused to launch his chatbot. Google has now signed a $2.7 billion deal with Noam's startup, Character, and Shazeer has agreed to return to work for Google. #Google #AI #WhatsBuzzing #shazeer #noam #startup #new #tebp #thirdeyeblindproductions

Perplexity, an artificial-intelligence startup aiming to challenge Google’s dominance in web search, is finalizing a new funding deal at around a $1 billion valuation, people familiar with the matter said, roughly doubling its valuation since its most recent financing a few months ago. The funding frenzy for the one-year-old startup is a remarkable example of the enthusiasm among some venture capitalists who think AI technology could challenge Google’s yearslong grip over search and breathe new life into startups after a bruising couple of years. Perplexity, co-founded by Chief Executive Aravind Srinivas, uses advanced AI models to provide direct answers to search queries, as opposed to a list of website links, something Google is also working on. Past efforts to dislodge Google in search haven’t gone so well. Microsoft has struggled to make a dent in Google’s search dominance after releasing a new version of its Bing search engine powered by large language models. The search startup Neeva, which operated a product similar to Perplexity, shut down this past year after failing to gain enough traction. Even so, Perplexity is growing fast. The company recently surpassed $10 million in annual revenue, a person familiar with the matter said. Visits to its mobile and desktop …

Generally, it has just been very concerning that many AI startups are actually more focused on raising big funds and scale right away, instead of raising decent amount and focus on refining their platforms or offering. Nothing wrong with scaling up, in the case of AI, more users means more data and better training, so scaling right away would also be a feasible strategic plan, however risky that maybe. But at the end of the day like any industry that going to revolutionalize the world, the hype would eventually wear off and the better player of it all will remain within the space. Just another cycle of technological development. AI is here to stay, so as long the tech being built is solving a real-world challenge, one way or another it will survive. Good Luck to all fellow founders and startup early team members that are dedicated on building better tech for our future. Hopefully, more of us also take a look on how we can push the rise of Decentralized Big Tech, the centralized one are now dominating and started to intimidate or dictate their term on the world. Decentralized big-tech will be by nature incorporate democratic consensus mechanism in their way of decision making, allowing for more voices to be heard. #DecentralizedBigTech #ArtificialIntelligence #Startup

AI startups are struggling to raise funds and the falling tech share prices aren’t helping. Despite raising $billions last year, “many are struggling to survive—and asking Silicon Valley’s biggest companies to bail them out.” “At least three once-hot AI startups have been rescued via a new type of deal that many in the tech industry say are acquisitions in everything but name. These deals have the advantage of skirting the typical regulatory process at a time when big tech’s growing control over generative AI is being scrutinized by governments.” “Character.AI announced a deal for Google to use its #technology and hire many of its researchers and executives, including its co-founders.” Google “negotiated a licensing fee worth $2 billion for the startup’s technology to help buy out early investors.” “Adept AI struck a deal in which Amazon agreed to hire most of the startup’s employees and paying about $330 million to license its technology.” “That was enough, along with Adept’s remaining cash, to pay back investors, but a disappointing turn for a company that just last year was valued at $1 billion.” Microsoft was the first “when it hired nearly all the employees from #AI developer Inflection to start a new consumer AI division and paid around $650 million to license its technology.” VCs, founders, and investors say “more exits—either pseudo-acquisitions or real ones—are coming,” but then they say this even when it’s not true. Apparently, sufficient funding from VCs is not coming, increasing the number of zombie startups (not just AI) that don’t have sufficient cash to grow. More evidence the AI bubble is bursting. “There were a lot of companies that raised on a big vision, but not tangible examples and actual detail,” said a founding partner at the AI-focused venture firm AIX Ventures. Now those companies are struggling. The growing industry skepticism is a marked change from last year, when money poured into AI startups following the blockbuster debut of OpenAI’s ChatGPT in November 2022. These startups are now trying to be acquired by big companies, but the Biden administration is opposed to these acquisitions for reasons of anti-trust. “These companies know the days of them being able to buy hundreds upon hundreds of smaller firms without attracting challenges are over,” a law professor said of tech giants like Amazon and Google. The Federal Trade Commission is now probing these deals to “see whether either buyer structured the arrangement to avoid government approval.” Just as the FTC is pursuing monopoly cases against Google (one court reached a decision this week) and other big tech firms, it will also likely oppose these acquisitions, despite the attempts by big tech to disguise them. What will other big AI startups do (Anthropic, Hugging Face, Mistral, Cohere, and of course OpenAI)? #innovation #hype #artificialintelligence https://lnkd.in/g8fsx44Z?

🚀 Recently, H, a startup founded by former Google employees, generated significant buzz in the tech world by raising $220 million in seed funding without launching a single product. Three months later, they finally revealed their first product, Runner H, aimed at agentic applications. This is noteworthy because it highlights a growing trend of startups securing substantial funding based on potential rather than proven results. In the current landscape of the Information Technology industry, we are witnessing a shift. Investors are increasingly willing to back innovative ideas, even if they haven't yet materialized into tangible solutions. This trend reflects a high level of confidence in the capabilities of technology, particularly in artificial intelligence and automation. However, this approach comes with risks. As we have seen before, the pressure to deliver can lead to challenges in execution, and unfulfilled promises may lead to skepticism among investors and customers alike. The balance between innovation and sustainable growth is delicate. H's journey could inspire other startups to seek bold funding rounds but also serves as a cautionary tale. It underscores the importance of a solid product roadmap, clear objectives, and realistic timelines. As we look ahead, this news might influence how we perceive startup viability. We might see an influx of ambitious projects aiming for big investments, but only those that can follow through with effective execution will likely thrive. I invite everyone to reflect on this. How do you see the influence of such bold funding strategies shaping our industry? What steps can startups take to ensure they meet the expectations set by significant investments? Let’s discuss! 💬 https://buff.ly/3CBB0Lw #StartupFunding #AIInnovation #TechLaunch #ParisTech #AgenticApplications #SeedInvestment #GoogleAlumni #TechNews

The strategic maneuvers of the "Big 3" — Apple, Amazon, and Google — further illustrate how these tech giants leverage their resources to dominate the AI landscape. Apple's integration of GenAI into its ecosystem, Amazon's substantial investment in AI startups, and Google's continued attempts at personalization reflect a broader agenda. These companies are ensuring their stranglehold on future AI innovations. What are your thoughts? #AIInvestments #TechStartups #VentureCapital

🚨 Big Money Moves and AI Buzz: This Week's Startup Rollercoaster What a week in the startup world! Google's making waves with a potential $23 billion deal for cloud security hotshot Wiz. Talk about a rocket ship – from startup to possible tech giant buyout in just 4 years. SoftBank's not sitting on the sidelines either. They've snagged AI chipmaker Graphcore, betting big on the AI gold rush. Speaking of spending sprees, Deel's at it again, adding Hofy to their cart for a cool $100+ million. But it's not all champagne and IPOs out there. Remember HeadSpin? That "unicorn" just sold for a measly $28 million after some major drama. Yikes. On a brighter note, disability-focused Making Space landed some seed money, and Exa's scoring millions to help AI search the web. Oh, and Coast somehow pulled off back-to-back funding rounds in this market. Impressive stuff. The real story? AI money's flowing like crazy. We've already seen 28 companies land $100 million+ rounds this year. It's only July, folks! Wiz Google Exa SoftBank Deel #wiz #google #startups #tech #ai #exa