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By Marc Vartabedian, WSJ Pro
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Good day. Artificial intelligence is everywhere, including at this year’s South by Southwest Conference and Festivals in Austin, Texas. At SXSW, be prepared to hear bold AI narratives such as “How AI is Empowering the World to Achieve More” and “AI and Humanity’s Co-evolution.”
Yet, traces of the harsh reality today’s startup founders face can also be found at the event, which kicked off on Friday. Sessions on the industry’s hardships included topics such as “Raising Venture Capital During a Market Downturn,” “How to Keep Your Startup Alive” and “Scaling Up Without Screwing Up.”
While some AI startups have raked in funding over the past 18 months, most startups in the broader venture-capital ecosystem are simply trying to survive. Venture funding for U.S. startups fell some 29% last year from 2022 to about $171 billion, according to the PitchBook-NVCA Venture Monitor. Compared to its 2021 peak, funding is down 51% and more startups are throwing in the towel as they near the end of their cash runways.
Josh Constine, a venture partner at venture firm SignalFire, said AI and shutdowns are the two biggest topics in the startup ecosystem. “It makes sense that [SXSW] is addressing AI, the newest transformative technology while being cognizant of the rough macro environment for startups,” he said.
Constine is leading a discussion at SXSW on Monday on AI and humanity’s co-evolution that will include Peter Deng, OpenAI’s head of ChatGPT.
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And now on to the news...
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Nvidia’s supercharged investment strategy is about more than returns. Nvidia has become an investor darling thanks to an artificial intelligence boom built on its chips. More quietly, the company also has made itself into one of the business world’s hottest venture-capital investors, The Wall Street Journal reports.
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Nvidia invested in about three dozen startups last year, according to Dealogic figures, more than tripling its activity from the previous year. The value of its investments in other companies reached about $1.55 billion at the end of January, according to Nvidia’s financial statements, up from $300 million a year prior.
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The investments give Nvidia a window into developing trends in tech as AI pushes into new industries and solves new problems. They also help the company build out the future ecosystem of businesses that depend on its technology.
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Sam Altman Rejoins OpenAI Board Along With Three New Directors
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OpenAI said Friday that Chief Executive Sam Altman is rejoining the company’s revamped board of directors, after an internal investigation concluded he was the right leader for the startup, WSJ reports. The company also added three new board members: Sue Desmond-Hellmann, former CEO of the Bill & Melinda Gates Foundation; former Sony Entertainment executive Nicole Seligman; and Fidji Simo, CEO of Instacart. The board also announced new governance measures, including a whistleblower hotline for OpenAI’s employees and contractors, as well as a stronger conflict-of-interest policy.
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Elon Musk’s xAI to Open-Source Its Grok Chatbot
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Elon Musk’s artificial-intelligence startup xAI will open-source Grok, its chatbot rival to OpenAI’s ChatGPT, the entrepreneur said. The move will be seen as another salvo in the long-simmering feud between Musk and OpenAI’s CEO Sam Altman in the artificial-intelligence arms race, WSJ reports. Earlier this month Musk sued OpenAI, Altman and fellow founder Greg Brockman, claiming the company had gone back on its original commitment to open-sourced, not-for-profit AI. Musk unveiled Grok in early November last year and said it was designed to tackle tasks including information retrieval and coding assistance as part of an effort to create AI tools “that assist humanity in
its quest for understanding and knowledge.”
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Eye-Scanning Worldcoin Venture Appeals Spanish Ban
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Worldcoin is appealing a decision from Spain that temporarily banned it from scanning people’s eyes in exchange for cryptocurrency tokens, saying it fully complies with laws and regulations on biometric data collection and data transfers, WSJ reports. The Spanish Data Protection Agency, or AEPD, on Wednesday ordered a precautionary measure prohibiting Worldcoin’s activities in the country for up to three months after it received several complaints on the collection of data from minors, and what it said were other infringements.
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People
Identity security startup Veza appointed Mike Towers as chief security and trust officer. He was previously chief digital trust officer at Takeda.
DNA synthesis technology startup Moligo Technologies appointed John Kuijpers as chief business officer. He was previously commercial director for human health at LGC Biosearch Technologies.
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Defense Unicorns, a provider of continuous software delivery for national security missions, landed $35 million in Series A funding led by Sapphire Ventures and Ansa Capital. Marco DeMeireles, co-founder and managing partner at Ansa Capital, will join the company’s board.
Remofirst, a San Francisco-based remote employee hiring platform, raised $25 million in Series A funding. Octopus Ventures led the round, with Nicholas Sando joining the board.
Hunch, a Dubai-based anonymous social polling platform, snagged $23 million in Series A funding with plans to expand to the U.S. Investors in the round included Hashed.
BrainCheck, an Austin, Texas-based cognitive health technology provider, picked up a $15 million investment from S3 Ventures and others.
Brevian, a Sunnyvale, Calif.-based platform for building AI agents with enterprise data, emerged from stealth with $9 million in seed funding led by Felicis.
Fijoya, a Tel Aviv-based provider of personalized employer-sponsored health and wellness services, secured an $8.3 million seed round led by Team8.
Bluwhale, an AI Web3 startup extracting insights from consenting user wallets across blockchain networks, was seeded with a $7 million investment from SBI Ven Capital and others.
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A street sign for a drone food-delivery drop-off site in Holly Springs, N.C. PHOTO: ALLISON JOYCE/BLOOMBERG NEWS
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What has replaced Silicon Valley Bank as start-ups’ favourite banker? (Financial Times)
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Inside Y Combinator's 'boom loop': The startup factory goes brasher, leaner and meaner (Forbes)
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