Good day. In a recent column we highlighted the rapid rise of open-source (or more specifically, open-weight) artificial-intelligence models. The free-to-download models–which might not have the precise bells and whistles of the closed-source ones–were recently found to account for nearly two-thirds of token volume on model-routing platform OpenRouter.

So, how are you rethinking your investment strategy in light of open-source AI?  How do you see it changing startup business models? Please email responses to vcnews@wsj.com.

Last week, we asked for your views on the use of AI in patient care. Following are edited excerpts of responses:

Kamal Singh, senior vice president, WestBridge Capital: “There's no debate about whether AI belongs in clinical care anymore; it's already happening. The biggest risk is skipping the steps that build evidence and trust to do it responsibly. Start where humans already fall short: triage, medication reminders and follow-through on care plans. All with physician oversight, of course. AI doesn't get tired or cut corners at the end of a 12-hour shift. Elderly care coordination and medication adherence are obvious wins for AI! Prove it there first, then go further.”

Fred Walke, founder and CEO, Wave Neuroscience: “In psychiatry and neurology, two people can carry the same diagnosis and have very different biology beneath it, which is a large part of why first-line treatment fails so often. AI earns its place in the clinic when it reads that individual signal, a patient's own brain activity or biomarkers, and gives the clinician a sharper picture of who is actually being treated.”

Medha Agarwal, general partner, defy.vc: “While AI can be an incredibly powerful tool for supporting clinical decisions, I expect clinicians to remain in the loop for the foreseeable future. I see AI serving as a support tool rather than a replacement for medical judgment. The biggest opportunity is not autonomous healthcare, but augmenting providers to deliver better, more consistent care efficiently.”

And now on to the news...

Protective move. American companies have a new AI addiction: cheaper Chinese models. But as the race for artificial-intelligence supremacy heats up, Beijing is considering tightening its grip on homegrown technology.

• Across Silicon Valley, models made by Chinese companies such as DeepSeek and Moonshot AI have become core to daily work at companies large and small, offering a less costly alternative and supplement to the products of OpenAI and Anthropic.
   
• Chinese officials have recently held discussions with domestic AI labs that produce the country’s most powerful models about how to safeguard their valuable proprietary technology, according to people familiar with the matter. Beijing is concerned that sharing some of this technology could help adversaries or other malicious actors and ultimately get weaponized against China, the people said.

Federal Reserve Chairman Kevin Warsh named more than a dozen external advisers to lead five task forces that will re-examine the way the central bank operates, drawing mainly on academics, former central bankers and business executives.

• Among the advisers: Greg Mankiw, a former top adviser in the George W. Bush administration; Nobel laureate Thomas Sargent; and Doug McMillon, former CEO of Walmart. There are also some wild cards, including conservative venture capitalist Marc Andreessen and two other movers and shakers from the tech world who will serve on a task force on employment.

Private-markets investor HarbourVest Partners has raised about $4.75 billion for its latest pool for co-investing alongside buyout and growth fund managers, who increasingly rely on such alternative sources of capital amid a persistent slowdown in fundraising across the industry. The Boston-based firm wrapped up its HarbourVest Partners Co-Investment Fund VII with roughly 13% more capital than the $4.2 billion it collected for a predecessor vehicle.

Funds

Pegasus Tech Ventures, a San Jose, Calif.-based venture firm, launched a $50 million corporate venture fund in partnership with Ohayo Dairy Products Co., a Japanese food manufacturer known for its dairy products, desserts and premium ice cream brands. Pegasus Tech Ventures will serve as the general partner, while Ohayo Dairy Products will be the fund’s sole limited partner. The fund will invest in startups in food and beverage, biotechnology, functional and wellness foods, supply chain innovation, and retail technologies.

People

Greycroft has promoted Carley Phillips, who leads the firm’s sustainability investing strategy, to partner from principal. Phillips, who joined Greycroft as an associate in 2022, helms the Greycroft Coca-Cola System Sustainability Fund, which has deployed $137 million. She has led investments in companies including Harbinger, Twelve, Laminar and Samsara Eco. The firm’s sustainability efforts include backing industrial decarbonization, advanced manufacturing, energy and climate technologies.

Norwest, a Menlo Park, Calif.-based venture capital firm, added two new hires to its growth equity team: Shawn Devilla, who joins as principal, and Leslie Foard, who joins as head of operations. Devilla was most recently at The Carlyle Group, where he led growth and buyout investments in software and technology-enabled services companies. Foard was previously a principal at Alpine Investors, where she led firm and people operations.

EDX Markets, a Chicago digital-asset technology firm, closed a $76 million Series C funding round led by SBI Holdings. The company plans to expand its trading, clearing and settlement capabilities and scale global operations.

Ollama, a Palo Alto, Calif.-based developer platform for open artificial-intelligence models, said it raised a $65 million Series B funding round led by Theory Ventures, with participation from Benchmark, 8VC, Y Combinator, Pace Capital, 49 Palms, GTMFund and others. The round brings Ollama's total funding to $88 million. Ollama is used by 8.9 million developers, a figure that has doubled since January, according to the company.

Hippo Harvest, a leafy greens grower that says its robotics- and machine learning-powered greenhouses produce USDA-certified organic greens, said it closed a $30 million Series C round. Cox Farms led the financing. The investment will unlock a 30-acre expansion at a new Hollister, Calif., facility, currently in permitting, and development of the company's next-generation robotic growing system, expanding growing capacity from one acre today and accelerating the commercialization of indoor-grown spinach, the company said.

Tangos, a Tel Aviv-based startup building AI agents to investigate financial crime, raised $20 million in seed financing. Red Dot Capital Partners led the round, with participation from Leaders Fund, Clarim, Venture Israel, SignalFire and others.

• Federal Regulator Warns Robotaxis Are a ‘Danger’ to the Public
   
• Bezos’ Space Venture Blue Origin Seeks $10 Billion in Funding Round
   
• The Chip Trade Is Helping Wall Street Shake Off Latest Iran Strikes
   
• Mapping 18 American Inventions That Created the Modern World
   
• China’s Zhipu AI Shares Surge on $4 Billion Fundraising
   
• China Says It Has Found Security Vulnerabilities in Anthropic’s Claude Code

This newsletter was compiled by Yuliya Chernova. 

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

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

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