Good day. The Food and Drug Administration will be rolling out a pilot program designed to speed up clinical trials by using artificial intelligence to streamline data collection. For this week’s question, we want to know, what impact will this initiative have? And what other innovations would you like to see in clinical trials? Please email responses to vcnews@wsj.com.

Last week, we asked about the implications of the SpaceX-Cursor deal. Here are responses, edited for length and clarity: 

• Anis Uzzaman, founder and CEO of Pegasus Tech Ventures, an investor in SpaceX: “We are witnessing the architecture of a new deal era. When the target’s valuation outpaces the acquirer’s liquidity, the ‘strategic option’ becomes the bridge. With nine-figure break fees as the potential floors, this playbook can now be the go-to for many pre-IPO giants looking to lock down the future before they even hit the public markets.”
   
• Robert Ackerman, managing director at DataTribe (before DataTribe he ran Founders Equity Partners, which invested in SpaceX): “The option structure is an ‘interesting’ piece of the deal. It tells me that even at this scale, the people writing the checks aren’t sure where the durable value sits—model layer, app layer or distribution. ‘Try before you buy’ derisks the bet for both sides (very expensively for SpaceX). Short to intermediate term, this solves real problems for both. Longer term, it’s another piece of the SpaceX vision heading into its summer IPO.”
   
• Siddharth Ramakrishnan, principal at Scale Venture Partners: “This deal is super weird on the surface—a rocket company buying a coding company? But it actually makes a lot of sense: xAI has a lot of GPUs but hasn’t had a hit coding product, while Cursor is rich with data on how developers do their jobs, but doesn’t have the resources of a frontier lab. It’s a big bet for both, but it’s the only way either can come out on top. Plus, it’s good for the industry if OpenAI and Anthropic face more competition at the coding model layer.”

And now on to the news...

AI boost. The Commerce Department said U.S. gross domestic product—the value of all goods and services produced across the economy—rose at a seasonally and inflation adjusted 2% annual rate in the first quarter. Economists surveyed by The Wall Street Journal had expected GDP growth of 2.2% for the January-to-March period.

• The first quarter saw a strong increase in business spending on categories tied closely to AI, like equipment and intellectual property products, underscoring just how much AI has become an engine for the nation’s economy.
   
• Overall business investment increased at a 10.4% annual rate in the quarter, the strongest growth in nearly three years.

Private equity has barely begun investing in law firms, but the backlash has already started. Lawmakers in three states are considering bills to make it harder for buyout firms and other corporate investors to acquire law practices, a burgeoning investment strategy that was long off limits for private equity. 

• In California and Illinois, legislators in April advanced bills that would cement prohibitions on nonlawyers owning or controlling legal practices. In Colorado, a bipartisan group of lawmakers introduced a similar bill last week, which on Wednesday passed the House Judiciary Committee.

The White House opposes a plan from Anthropic to expand access to its powerful artificial-intelligence model Mythos, complicating the rollout of an AI tool capable of carrying out cyberattacks and sowing widespread disruptions online. Anthropic recently proposed letting roughly 70 additional companies and organizations use Mythos, which would have brought the total number of entities with access to about 120, people familiar with the matter said. Administration officials told the company they oppose the move because of concerns about security, the people said.

Funds

European investor Earlybird Venture Capital closed its eighth early-stage tech fund at €360 million (about $422 million), bringing the firm’s assets under management to €2.5 billion. To date, Earlybird has invested in startups such as Black Forest Labs, SpAItial AI, Sintra AI, Arago, Porters and Rivia through the new fund.

BMW i Ventures launched its third fund with $300 million in commitments to invest in North American and European AI startups across the automotive ecosystem. The new fund brings the firm’s total capital under management to $1.1 billion.

Northwestern Mutual has allocated $150 million to Northwestern Mutual Future Ventures’ third fund, which will target emerging and growth-stage companies in fintech and insuretech.

Illuminate Financial, a venture-capital firm investing in early-stage enterprise AI and fintech startups, closed its $135 million early growth fund.

People

Helena Capital appointed Katy Nelson as general partner. She previously spent five years at Andreessen Horowitz as partner.

OneTrust, a platform built to prevent data misuse across businesses’ tech stack, appointed Doug Owens as chief financial officer. He most recently served as managing director, business operations at Vista Equity Partners.

Rogo, a New York-based generative AI platform built for financial services, landed $160 million in Series D funding. Kleiner Perkins led the investment, which included contributions from Khosla Ventures and several others.

Hightouch, a San Francisco-based startup using generative AI to help marketers create and manage campaigns, scored $150 million in Series D funding, valuing the company at $2.75 billion. Bain Capital Ventures and the growth equity business in Goldman Sachs Alternatives led the round, which included participation from TD7 and others.

Firestorm Labs, a San Diego-based defense technology startup enabling on-demand production of mission-critical systems, secured $82 million in Series B financing led by Washington Harbour Partners.

Kashable, a New York-based provider of credit and financial wellness solutions for employees, nabbed $60 million in Series C funding led by Sustainable Investing at Goldman Sachs Alternatives.

Versana, a New York-based enterprise data and digital infrastructure provider for the syndicated loan and private credit markets, closed a $43 million investment. BNP Paribas led the funding, which included participation from Fitch Ventures, MassMutual Ventures, Motive Partners and others.

Casa, a San Francisco-headquartered membership-based home management startup, raised $20 million in Series A funding led by Forerunner Ventures.

Fence, a startup building infrastructure for asset-backed finance and debt capital markets, added $20 million in new funding led by Galaxy Ventures. The company has offices in New York and Madrid.

Liquid, a cross-asset trading platform, completed an $18 million seed round co-led by Neo and Left Lane Capital.

pmtbox, an Orem, Utah-headquartered platform that unifies payments, risk and data for merchants, was seeded with a $15 million investment. Tandem Ventures led the round, with Founding Partner Alex Bean joining the company’s board.

General Analysis, a San Francisco-based startup building security infrastructure for agentic AI, was seeded with a $10 million investment. Altos Ventures led the round, which saw additional support from 645 Ventures, Menlo Ventures and Y Combinator.

• Apple Sales Top $111 Billion in Second Quarter, Powered by iPhone 17

• Zuckerberg Blames Slower Sales on War, Layoffs on AI Costs in Meeting

• AI Has Made Memory Chips One of the World’s Most Profitable Products

• The Clock Is Ticking for Big Tech to Make AI Pay

• U.S. Senators Vote to Ban Themselves From Trading on Prediction Markets

• Zoom Has a ‘SWAT Team’ to Stand Out on ChatGPT and Gemini

• How Silicon Valley’s Brightest Parents Broke Their Own School

• Stripe introduces Link, a digital wallet that autonomous AI agents can use, too (TechCrunch)
   
• Would you like a zombie app? Friendster and Vine are back from the dead. (Business Insider)
   
• AI's endless game of thrones (Axios)
   
• It’s time to make a plan for nuclear waste (MIT Technology Review)

This newsletter was compiled by Matthew Strozier and Zachary Cole.

Share your tips, comments and questions: vcnews@wsj.com

The team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

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