Good morning. Did you know that AI tools like ChatGPT get “anxiety” when users input violent or disturbing information?
It’s true. A study by the University of Zurich and the University Hospital of Psychiatry Zurich published last week found that OpenAI’s famous tool changes how it interacts with users after fielding prompts with calming imagery and meditations.
Coming soon: so-called prompt injections to unwind the AI models before interacting with users in distress. There’s a joke in here somewhere, I’m sure of it. —Andrew Nusca
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AI has led to a VC investment boom not seen since 2021
Unicorns, schmunicorns.
Investors plowed more money into U.S. startups this quarter—more than $30 billion—than any other in the past four years thanks to a little thing called AI.
New PitchBook data shows that it’s not over, either. Another $50 billion or so of investment is still in the works courtesy major rounds by OpenAI, SSI, and Anduril.
Investors seem to think this latest boom isn’t like what happened in 2021, when the pandemic bubble burst almost as fast as it appeared. Real revenues—hundreds of millions or more—certainly help with that.
A major caveat: Most of the investment has flowed to the largest private companies, even if this year’s total investment is nearing 2021 levels. Just six deals (xAI, Databricks, etc.) accounted for 40% of the quarterly total, per PitchBook.
That shortlist could soon expand. The fintech company Stripe recently announced a tender offer at a reported $91.5 billion valuation; the AI startup Anthropic just as recently closed a round valuing it at $61.5 billion.
A number of smaller players—Abridge, ElevenLabs, Guesty, Harvey, Lambda, Ramp, Shield AI, Together AI, and others—aren’t far behind. —AN
Foxconn built its own AI model
The world’s largest contract electronics maker (and the step that comes after the iPhone’s “Designed by Apple in California,” among other devices) has reportedly built its own AI model.
Taiwan’s Hon Hai Technology Group—better known as Foxconn—said Monday that it has built its own large language model, or LLM, with reasoning capabilities.
Called “FoxBrain,” it was developed in-house and said to have been trained in just four weeks using 120 Nvidia H100 graphics processing units, according to the Wall Street Journal.
FoxBrain is based on Meta’s Llama 3.1 model and can analyze data, perform mathematics, generate code, and reason. The company told the Journal that its AI model’s performance was “slightly behind” what’s on offer from Hangzhou, China’s DeepSeek.
Notably, FoxBrain is optimized for traditional Chinese, which is in use in Taiwan, Hong Kong, and Macau.
Foxconn’s AI model was initially designed for internal use, but the company says it plans to open-source the tool for collaboration with third parties. As you might expect for the world’s leading device assembler, it’s hoping to leverage its AI model’s smarts to see improvements in manufacturing and the supply chain. —AN
Chinese investors have put millions into xAI, Neuralink, and SpaceX
Money from China is reportedly flowing into Elon Musk’s various ventures.
A new Financial Times report notes that wealthy Chinese investors are “quietly funneling tens of millions of dollars” into xAI, Neuralink, and SpaceX—all private companies, unlike Tesla—to capitalize on Musk’s working relationship with U.S. President Donald Trump as advisor and head of the DOGE cost-cutting initiative.
“The investments are being placed through opaque structures known as special-purpose vehicles, which have the benefit of concealing the investors’ identities, to avoid the ire of U.S. authorities and companies wary of Chinese capital during a nadir in relations between the two countries,” according to the report.
There’s nothing illegal about SPVs, but the bigger picture—that Musk has substantial business ties to China at a time when the U.S. government he’s working for is at odds with the nation—adds to continued concerns about his conflicts of interest.
The FT report says the capital headed to Musk’s interests “is primarily profit-driven and has little to do with technology transfer or influencing public policy.”
With China’s domestic economy showing weakness, wealthy citizens are again looking abroad for investment. Consumer prices in China recently fell for the first time in more than a year as deflationary pressures set in. —AN
More data
—Four TikTok U.S. bidders are in the mix, according to President Trump.
—Everyone’s talking about Manus, a “fully autonomous” Chinese AI agent that’s either a major milestone or a mega miss.
—Apple’s smart home hub delayed. Blame the wait on a better Siri.
—Millions of connected consumer devices are at risk thanks to a “backdoor” in a popular microchip.
—Service robots: So hot in Japan right now. Market could “almost triple” by 2030 because of a labor shortage.
—Meta bent over backwards to appeal to China. “Extreme lengths to censor content,” according to a whistleblower, and obfuscate activity to U.S. regulators.
—Cognizant under pressure. An activist investor built a billion-dollar stake in the IT company.
—ServiceNow in talks to acquire Moveworks. Some $3 billion for the Silicon Valley AI company.
—Amazon antitrust case continues. But first, the FTC needs to define who its competitors are (and who Amazon thinks they are).
—2G networks aren’t so easy to shut down. Spectrum is scarce, but concerns abound about leaving the poor behind.
—CoreWeave’s founders mostly cashed out but retain voting control ahead of a possible IPO.
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