Good day. Venture firm Andreessen Horowitz has raised $6.75 billion for its fifth growth fund, part of a total fundraising haul reaching more than $15 billion earlier this month.

WSJ Pro spoke with David George, a general partner at Andreessen Horowitz who leads the firm’s growth investing, about why he believes there is no artificial intelligence bubble, why OpenAI could eventually see its valuation increase well above the currently discussed $830 billion, and other topics.

Before joining the firm in 2019, George was an investor at growth-investment firm General Atlantic. Here are excerpts of our conversation, edited for length and clarity.

WSJ Pro: Your prior growth fund was smaller than the one before. But this new one is bigger than both. Why?

George: When it comes to sizing the funds, we always raise for the opportunity set we see ahead of us. The sizing up of this fund is a reflection of this massive technology shift with AI, paired with companies staying private longer.

WSJ Pro: How did limited-partner demand for late-stage change?

George: LP demand has been pretty consistent for us across the cycles. We’ve been fortunate to deploy and also return capital, which our LPs have been pleased by.

I do think there’s a broader market recognition of the quality of the companies in the private markets, especially in this new AI wave, and some of what’s been happening in American Dynamism. [Andreessen Horowitz’s American Dynamism strategy focuses on defense, manufacturing and related sectors.]

If you want to invest in the highest-growth next generation of market-leading companies that are going to become the next “Mag Seven” hopefully, they are available in the private markets and not so much in the public markets.

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And now on to the news...

Rare-earth magnet maker raises $215 million. Texas rare-earth magnet maker Noveon Magnetics has raised $215 million from investors as the U.S. pushes to develop domestic sources of a vital electronics component that China, the world’s largest supplier, has under a chokehold. One of the few U.S. rare-earth magnet makers, Noveon is riding a wave of urgency stemming from a U.S. trade war with China that has put once-obscure critical minerals into sharp focus.

• The company, started in 2014, began delivering magnets only in the past two years and is now vying to supply the array of American industries that need magnets.
   
• The raise—which is roughly double all of Noveon’s prior venture-capital funding—comes mostly from One Investment Management, the investment firm of Rajeev Misra, the former long-running leader of SoftBank Group’s mammoth Vision Fund.

Blueprint Equity has quietly built a reputation among institutional investors that’s enabled the growth-equity firm to wrap up its third and largest fund with $333 million. The firm’s final tally for Blueprint Equity Fund III exceeded both a $300 million target and the $200 million the firm ultimately gathered for a predecessor vehicle that closed in 2022. Founded in 2018 by managing partners Sheldon Lewis and Bobby Ocampo, Blueprint targets investments of $5 million to $15 million in enterprise software and technology-enabled services companies that generally aren’t big enough or expanding fast enough to attract many growth-equity or late-stage venture investors.

OpenAI and ServiceNow said they signed a three-year deal that will integrate the ChatGPT-maker’s AI models and agents into ServiceNow’s business software. The deal depends on customers using OpenAI’s models within ServiceNow, and also includes a revenue commitment from ServiceNow to OpenAI. More specific terms weren’t disclosed. The pact is the latest sign that AI agents, independent bots that can take action on behalf of humans, are becoming standard inside core business software. 

ClickHouse, a database management system provider, closed a $400 million Series D round. Dragoneer Investment Group led the funding, which included participation from Bessemer Venture Partners, Index Ventures, Khosla Ventures, Lightspeed Venture Partners and others.

Ivo, a San Francisco-headquartered AI legal-tech startup, scored $55 million in Series B funding. Blackbird led the investment, which included contributions from Costanoa Ventures, Uncork Capital and Fika Ventures.

Fleetzero, a Houston-based startup building hybrid and electric propulsion systems for ships, landed $43 million in Series A funding led by Obvious Ventures.

Dropzone AI, an agentic security operations center developer, grabbed $37 million in Series B financing led by Theory Ventures.

TaleMonster Games, an Istanbul-based gaming studio, collected $30 million in Series A funding. Arcadia Gaming Partners and Andreessen Horowitz co-led the funding, which saw additional participation from Point72 Ventures and General Catalyst.

Tive, a Boston-based provider of supply chain and logistics visibility technology, added $20 million in new funding led by Lightsmith Group.

Otto Sport AI, a Minneapolis-based intelligent operating system for youth sports organizations, was seeded with a $16.5 million investment co-led by Mamba Growth Equity and Rally Ventures.

Ultra, a Brooklyn, N.Y.-based startup offering a nicotine-free pouch for sustained focus and energy, snagged $11 million in Series A funding led by Left Lane Capital.

Mave, a Toronto-headquartered real estate AI startup, closed a 5 million Canadian dollar, or $3.4 million, seed round from investors including Staircase Ventures, Relay Ventures, N49P and Alate Partners.

• Lockheed Martin CIO Says AI Is Remaking Her Role

• OpenAI to Begin Testing Ads in ChatGPT in Push for Fresh Revenue
   
• Claude Is Taking the AI World by Storm, and Even Non-Nerds Are Blown Away
   
• Chinese AI Developers Say They Can’t Beat America Without Better Chips
   
• Trump Pushes Plan for Tech Companies to Fund New Power Plants
   
• Why the Tech World Thinks the American Dream Is Dying
   
• I Have Over 16,000 Unread Emails. Gmail’s New AI Wants to Help.

• U.S. is scrutinizing Big Tech talent acquisitions, FTC chief says (Bloomberg)
   
• 'Task' versus 'purpose': Nvidia CEO Jensen Huang explains why AI won't kill jobs. (Business Insider)

This newsletter was compiled by Matthew Strozier and Zachary Cole.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

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

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