Good day. New York-based Steel Atlas, which hopes to match U.S. and European startups with funders and deployment opportunities in Saudi Arabia, has raised its first venture fund of $10 million.

Cameron Porter, co-founder of Steel Atlas, says venture investors are spending a lot of time in the Persian Gulf states, including Saudi Arabia, and searching for capital isn’t the only reason. Saudi Arabia’s government has set goals that dovetail with those of venture investors in the West, he said.

“We view this alignment as being driven by two increasingly important factors: global geopolitical realignment and mutual technological interests,” Porter said.

Steel Atlas was founded last year by General Partners Porter and Talal Attieh. Backers of its fund included Apeiron, the private investment firm of entrepreneur Christian Angermayer; Untitled, a fund of funds run by Magnus Rausing, of the Tetra Pak conglomerate; and global industrial asset owners and operators with a focus on Saudi Arabia.

The firm’s portfolio includes climate-tech and industrial companies, among them, Geneva-based nuclear energy startup Transmutex; Washington, D.C.-based GenLogs, which is developing a sensor network for freight, and Austin, Texas-based Group1.ai, creating batteries that use an alternative chemistry to lithium ion that isn’t reliant on minerals controlled by China.

Porter said the Saudi government is confronting climate change and investing in industries that would diversify its economy’s reliance on oil.

Meanwhile, a lethargic market has venture-backed startups in the West looking for reliable capital and locations to build their first scale-up facilities.

Read the full article. 

And now on to the news...

Online teen-safety rules. The Senate overwhelmingly passed legislation Tuesday requiring technology companies to take steps to protect children from harmful content on the internet, but the effort faces an uncertain fate in the House because of concerns about free speech, The Wall Street Journal reports. Senators voted 91 to 3 to approve the Kids Online Safety Act and the Children and Teens’ Online Privacy Protection Act.

• The proposal requires companies to provide children under 17 with the strictest-possible safety guardrails on their platforms as a default.
   
• The package charges the Federal Trade Commission with deciding what is considered to be harmful content.

U.S. authorities have filed criminal and civil charges against Nader Al-Naji, founder of cryptocurrency trading and social-media platform BitClout, alleging he defrauded investors, WSJ reports. Al-Naji, under the pseudonym “Diamondhands,” was arrested on Saturday and presented to a magistrate judge in California on Monday, the Justice Department said Tuesday.

• The 32-year-old Los Angeles resident faces one count of wire fraud, which carries a maximum prison sentence of 20 years if convicted, according to a sealed complaint filed by federal prosecutors in Manhattan.
   
• The U.S. Securities and Exchange Commission also filed charges against Al-Naji, alleging fraud and the unregistered offering and sale of cryptocurrency.

The enthusiasm that fueled spending on generative AI is calming, analysts and corporate technology leaders say. But when companies do spend, Microsoft is winning many of their dollars, WSJ reports. Dan Ives, managing director and senior analyst at Wedbush Securities, said he estimates about 70% of artificial intelligence software spending in the last 12 months is tied to the Microsoft ecosystem. That is in part thanks to the company’s Copilot tool, which can be integrated with its existing suite of products, and its relationship with OpenAI, whose GPT models run on Microsoft’s Azure cloud infrastructure.

The big question going into the Federal Reserve’s meeting Wednesday comes down to how strongly officials signal their desire to cut rates, WSJ reports. The central bank is widely expected to hold its benchmark short-term interest rate steady while setting the table to begin a series of reductions at the next meeting in mid-September.

• The Fed releases its policy statement at 2 p.m. Eastern time on Wednesday. Fed Chair Jerome Powell speaks at a news conference at 2:30 p.m. The WSJ looks at the four most important questions ahead of the decision.

People

European early-stage investor Visionaries Club appointed Katy Sexton as vice president of communications and Betty Lu as chief of staff. Sexton was previously at Verlinvest, while Lu was at Bain & Company.

Kiswe, a direct-to-consumer streaming company, named Joe Statter to the post of chief financial officer. He was most recently chief executive officer of Varsity Care Adult Health Services.

Type One Energy, a fusion energy startup, added $53.5 million in seed funding, bringing the round total to $82.5 million. Investors included GD1 and Breakthrough Energy Ventures.

Rhombus, a Sacramento-based provider of cloud-managed physical security, scored $45 million in Series C funding. NightDragon led the round, with Managing Director Morgan Kyauk joining the company’s board.

Credo AI, a Palo Alto, Calif.-based AI governance, risk and compliance software provider, picked up a $21 million investment from Mozilla Ventures, FPV Ventures and others.

Haus, a San Francisco-based decision science and marketing measurement startup, added a $20 million investment led by 01 Advisors.

Lineaje, a Saratoga, Calif.-based software supply chain security management provider, grabbed $20 million in Series A financing led by Prosperity7 Ventures, Neotribe and Hitachi Ventures.

Clutch Security, a Tel Aviv-based non-human identity security platform, emerged from stealth with $8.5 million in seed funding led by Lightspeed Venture Partners.

FranShares, a Chicago-based platform for franchise investing, landed $4.1 million in seed financing led by Chicago Ventures.

Not Diamond, a San Francisco-based startup whose technology helps developers route queries to the best AI models, exited stealth with $2.3 million in funding led by defy.

• X CEO Linda Yaccarino contends with pitfalls of sharing power with Elon Musk
   
• The hidden autopilot data that reveals why Teslas crash
   
• 3D printers are having a moment thanks to the U.S.
   
• Amazon pushes fast delivery into rural areas in challenge to post office
   
• Meta settles Texas’ facial-recognition case for $1.4 billion

• It took some serious nerve for Wiz to walk away from Google’s $23 billion offer (TechCrunch)
   
• From Meta CTO to climate tech investor: Mike Schroepfer on his big pivot (MIT Technology Review)
   
• Neuralink rival Synchron’s brain implant now lets people control Apple’s Vision Pro with their minds (CNBC)

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, Brian Gormley, Angus Loten and Marc Vartabedian.

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