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Funding rounds, M&A, regulation, enterprise adoption

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Starcloud raises $250 million for orbital data centers as launch options dry up
TechCrunch AI
BusinessAug 21

Starcloud raises $250 million for orbital data centers as launch options dry up

Starcloud, a startup building satellites for in-orbit AI inference, has raised a $250 million extension to its Series A, bringing the round to $420 million and valuing the company at $2.3 billion. The new funding, led by Manhattan West Ventures with participation from Nvidia ($25 million) and Cisco, will support a larger manufacturing facility and the development of its Starcloud-3 spacecraft, designed for SpaceX's Starship. CEO Philip Johnston is also securing launch capacity amid a tightening rocket market, as Falcon 9 is scheduled to end by 2028 and alternatives like New Glenn and Vulcan are not yet flying regularly. Starcloud plans to launch two Starcloud-2 compute satellites on rideshare missions in 2027 for customers including US government agencies. The company has requested FCC permission for 88,000 spacecraft, betting on Starship to lower launch costs and make orbital data centers competitive with terrestrial ones. The funding highlights growing investor interest in space-based AI infrastructure, even as launch logistics remain a major bottleneck.

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When AI designs a drug, who gets the credit?
MIT Technology Review
BusinessAug 21

When AI designs a drug, who gets the credit?

The article explores the legal and ethical questions around AI-generated drug inventions, focusing on a patent dispute involving Insilico Medicine's AI-discovered molecule for pulmonary fibrosis. It highlights that US patent law currently recognizes only humans as inventors, as established in the DABUS case where an AI was denied inventor status. The piece quotes patent attorney Sarah Korman and discusses how laws will likely need to evolve as AI becomes more autonomous in discovery. Ryan Abbott, who brought the DABUS test case, warns that misattributed inventors could invalidate AI-related patents. Overall, the story underscores the growing tension between technological capability and existing intellectual-property frameworks.

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AI data startup Micro1 reaches $500M gross run rate amid AI training boom
TechCrunch AI
BusinessAug 21

AI data startup Micro1 reaches $500M gross run rate amid AI training boom

Micro1, a four-year-old AI data labeling startup, has surged to a $500M gross annual run rate in just eight months, up from $100M, with net run rate between $150M and $200M. The growth reflects booming demand for unique AI training data from top labs, though Micro1 trails rivals Mercor and Handshake. The company is expanding margins by generating synthetic data and selling off-the-shelf datasets to multiple customers, reaching gross margins of 80-90%. Founder Ali Ansari publicly stated Micro1 does not sell data to Chinese model makers, addressing controversy over off-the-shelf data exports. Micro1 pivoted from AI recruiting to data labeling and is also building robotics pre-training datasets. The startup may have recently raised a new round at a higher valuation than its $500M Series A last September.

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It’s Greg Brockman’s OpenAI now
The Verge AI
BusinessAug 20

It’s Greg Brockman’s OpenAI now

OpenAI is undergoing a significant leadership shift as Greg Brockman, the company's president and co-founder, has emerged as the de facto second-in-command. This consolidation of power follows a year marked by high-profile legal battles with Elon Musk and Apple, as well as widespread scrutiny over security issues. A steady stream of senior executives, including the CTO of B2B applications and the head of Sora, have departed the company throughout the year. The exodus accelerated in April, with key figures like Fidji Simo and Kate Rouch leaving for medical reasons, which expanded Brockman's operational purview. Brockman now oversees day-to-day operations and product strategy, including OpenAI's super app efforts, following a recent executive reorganization focused on revenue growth. This shift signals a new era of centralized operational control at OpenAI as it prepares for an IPO.

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Stripe didn’t really buy OpenRouter because of the ‘singularity’
TechCrunch AI
BusinessAug 20

Stripe didn’t really buy OpenRouter because of the ‘singularity’

Stripe has confirmed the acquisition of AI model router OpenRouter for a reported $7.5 billion, a significant jump from the startup's $1.3 billion valuation just three months prior. The deal, which reportedly saw Stripe outbid competitors like Databricks, grants the founders $1.5 billion and investors the remaining $6 billion. In a leaked letter to investors, Stripe's founders humorously cited the 'singularity' as a primary motivation, though they clarified this refers to the economic shift driven by AI adoption. The acquisition is strategic for Stripe, allowing it to embed itself into the management of AI expenses and capital flows for developers. With 88% of the Forbes AI 50 already using Stripe, the move positions the payments giant to handle the financial infrastructure for the next wave of agentic AI applications. OpenRouter is expected to continue operating independently, maintaining its product and mission while integrating with Stripe's developer platform.

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Cognition CEO denies report that SpaceX tried to acquire the startup
TechCrunch AI
BusinessAug 19

Cognition CEO denies report that SpaceX tried to acquire the startup

Bloomberg reported that SpaceX attempted to acquire AI coding startup Cognition to bolster its AI capabilities against competitors like OpenAI and Anthropic. Cognition CEO Scott Wu quickly denied the report on X, stating the company is not for sale and that no talks occurred. This development follows SpaceX's recent $60 billion acquisition of Cursor and its earlier purchase of xAI, signaling a massive pivot toward AI monetization. SpaceX has stated that AI will constitute 99% of its value in the next few years, making coding tools a critical revenue stream. Cognition, which recently raised $1 billion at a $25 billion valuation, remains a key independent player with enterprise clients like Goldman Sachs. While the acquisition talks are reportedly inactive, the companies may still collaborate on computing capacity, highlighting the intense consolidation in the AI coding sector.

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Meet the startup helping Wall Street put a price on AI compute
TechCrunch AI
BusinessAug 19

Meet the startup helping Wall Street put a price on AI compute

Silicon Data has secured a $30 million Series A to establish a standardized reference price for GPU rental and AI compute. The startup aims to create an index that will serve as the settlement basis for Wall Street futures contracts. This initiative addresses the lack of straightforward pricing mechanisms in the rapidly expanding AI infrastructure market. Silicon Data plans to launch its compute futures trading on the CME on October 5th, subject to regulatory approval. The move signals a maturation of the AI economy, where compute costs are becoming a hedgeable financial asset. Steve Hou, head of research at Silicon Data, argues that data indicates the AI buildout remains healthy despite headlines about chip depreciation. This development bridges the gap between tech infrastructure and traditional financial markets.

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TerraPower’s nuclear reactor has a secret weapon for powering AI data centers
TechCrunch AI
BusinessAug 19

TerraPower’s nuclear reactor has a secret weapon for powering AI data centers

TerraPower, the nuclear startup founded by Bill Gates, is set to announce its first dedicated data center project this year, with construction expected to break ground in 2027. The company’s 345-megawatt molten salt-cooled reactor offers a distinct advantage over traditional nuclear plants by utilizing energy storage to handle the rapid load fluctuations of AI workloads. While standard nuclear reactors struggle to ramp up or down quickly, TerraPower’s design allows it to complement intermittent sources and smooth out the power demands of GPU-intensive training and inference. This approach addresses a critical bottleneck for AI infrastructure, where natural gas turbines are failing under stress and battery banks are adding significant costs. Meta has already agreed to purchase eight of TerraPower’s Natrium power plants, signaling strong industry confidence in this solution. By leveraging its ability to operate at peak capacity while managing variable loads, TerraPower positions itself as a key player in powering the next generation of AI data centers.

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Nvidia’s new financial strategy does not compute
The Verge AI
BusinessAug 19

Nvidia’s new financial strategy does not compute

Nvidia is collaborating with major financial institutions like BlackRock and Apollo to create a $500 billion financing structure that treats compute as an investable asset class. CEO Jensen Huang argues that GPUs are now long-lived, revenue-generating assets, a stark contrast to his previous comments devaluing older chip generations. This move draws comparisons to the mortgage-backed securities market, raising concerns about potential saturation in the AI data center market. Critics note that the current demand is heavily driven by frontier labs whose profitability remains uncertain. Additionally, the rise of efficient open-source models from China poses a threat to the assumption of ever-growing compute demand. The article highlights that these agreements are currently memorandums of understanding rather than finalized deals, echoing past unfulfilled Nvidia commitments.

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Etched’s valuation doubles to $21B in a month
TechCrunch AI
BusinessAug 18

Etched’s valuation doubles to $21B in a month

Etched has raised $700 million at a $21 billion valuation, doubling its worth in just one month. The funding round was led by Jane Street, which tested the startup's hardware and reported positive results. Etched specializes in 'frontier inference clusters,' offering full systems designed to speed up the computing process after a user submits a prompt. The company developed a low-voltage prefill chip and a new cluster-scale memory system to handle the memory-intensive decode phase more efficiently. This approach aims to deliver higher speeds and lower costs compared to competitors like Nvidia. Etched has also clarified that its chips are no longer custom-etched for specific models but can run any frontier model. The rapid valuation increase highlights intense investor enthusiasm for specialized AI inference hardware.

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Perplexity’s free AI offer left it with millions more users in India
TechCrunch AI
BusinessAug 18

Perplexity’s free AI offer left it with millions more users in India

Perplexity conducted a massive growth experiment by offering free 12-month Pro subscriptions to 360 million Airtel customers in India. The partnership triggered a surge in adoption, resulting in 56 million downloads over seven months and peaking at 22 million monthly active users. This strategy successfully leveraged India's low data costs and large smartphone market to rapidly scale the user base. However, once the free redemption window closed in January, new downloads dropped by more than 90%. Despite the decline in new acquisitions, retention remained strong, with monthly active users holding at nearly 14 million by July. The results provide critical insights into whether subsidized AI access can convert into lasting revenue in emerging markets.

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Anthropic’s annualized revenue surges to $65B
TechCrunch AI
BusinessAug 18

Anthropic’s annualized revenue surges to $65B

Anthropic's annualized revenue run rate has surged to $65 billion as of late July, marking a significant acceleration from $47 billion in May and just $9 billion at the end of last year. Investors anticipate the company will finish 2026 with revenue between $100 billion and $120 billion, maintaining this historic growth trajectory. In comparison, rival OpenAI has doubled its revenue to $40 billion, though Anthropic's growth rate has captured more investor attention. Both companies have filed confidential IPO paperwork, with Anthropic expected to debut on public markets as soon as this fall. The company is seeking a valuation of $2 trillion or more, which would make it the largest market debut in history. This valuation represents a massive jump from its $965 billion valuation in late May, highlighting the intense capital inflow into the AI sector.

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