“Turn on to politics, or politics will turn on you.”
That’s a famous line from perennial presidential candidate Ralph Nader from more than 20 years ago, and it echoes back to what Greek general Pericles said around 420 BCE. Politics will find and change you, whether you want it to or not. Which brings us to Anthropic.
Anthropic—valued at $380 billion, with a deluge of Silicon Valley’s most prominent investors on its cap table—is in what my colleague Jeremy Kahn calls “the biggest crisis in its five-year existence.” The company’s been in an all-out battle with the Pentagon, a standoff that goes something like this: Anthropic has refused to allow its tech to be used around mass surveillance or lethal autonomous weapons. Secretary of War Pete Hegseth didn’t accept this, saying that technology should be used for “any lawful purpose.” And Anthropic didn’t yield.
Cue the cascade of consequences: The Pentagon terminated its $200 million contract with Anthropic and labeled the LLM giant a “supply chain risk.” This is possibly “serious blow to Anthropic’s business” and has no precedent, as Jeremy points out:
Legal and policy experts said the government’s unprecedented decision presents profound questions about the relationship between the government and business in the U.S. It is the first time the U.S. has ever designated an American company a supply chain risk, and the first time the designation has been used in apparent retaliation for a business not agreeing to certain contractual terms. Anthropic said in a statement Friday that it would take legal action to try to overturn the Pentagon’s designation.
Effectively, Anthropic’s door into the trillion-dollar defense industrial complex seems to have raucously slammed closed. And, as Fortune’s Sharon Goldman scooped last week, OpenAI has stepped in to fill the void. Sam Altman seemingly got the deal done rapidly, and Sharon found out what he told employees:
Altman told employees at the all-hands that the government is willing to let OpenAI build its own “safety stack”—that is, a layered system of technical, policy, and human controls that sit between a powerful AI model and real-world use—and that if the model refuses to perform a task, then the government would not force OpenAI to make it do so.
Still, even Altman knows what this looks like, admitting in an “Ask Me Anything” session on X that the deal “was definitely rushed, and the optics don’t look good.” Meanwhile, the chaos continues, as Anthropic’s Claude passed ChatGPT in the Apple App Store over the weekend, and seemingly had an outage this morning. I suspect it’s going to be an even busier week than usual in AI.
See you tomorrow,
Allie Garfinkle
X: @agarfinks
Email: alexandra.garfinkle@fortune.com
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VENTURE CAPITAL
- Ease Health, a New York-based company building AI-native operating systems for behavioral health providers, raised $41 million Series A funding. Andreessen Horowitz led the round.
- Smack Technologies, an Austin, Texas-based defense and national security solutions AI lab, raised $32 million in Seed and Series A funding. Geodesic Capital and Costanoa Ventures led the Series A and Point72 Ventures led the seed round.
- Antiverse, a Cardiff, Wales-based AI-driven company designing therapeutic antibodies for disease targets, raised $9.3 million Series A funding. Soulmates Ventures led the round and was joined by Innovation Investment Capital, DOMiNO Ventures, DBW, Kadmos Capital and i&i Biotech Fund.
- Xsensio SA, a Lausanne, Switzerland-based, deep-tech continuous biochemical monitoring company, raised $7 million in Series A financing. WI Harper led the round and was joined by Privilège Ventures, the European Innovation Council, and others.
- Procode AI, an Los Angeles, Calif.-based AI-powered revenue cycle management company, raised $4 million in funding and acquired the Auctus Group, a leading U.S. biller for plastic surgeons and dermatologists. Story Ventures led the investment and was joined by CHAP Health Ventures, Progression Fund, and Dmitry Shevelenko.
- Groundhawk, an Espoo, Finland-based infrastructure software technology company, raised $2.3 million in seed funding. Greencode Ventures and 2C Ventures led the round.
PRIVATE EQUITY
- Warburg Pincus agreed to invest up to $1 billion in Global Eggs, the largest multinational producer and distributor of table eggs.
- J.C. Flowers committed up to $200 million to support the launch of Accelerated Wealth Partners, a New York-based company that acquires and scales groups of registered investment advisors.
- Bain Capital acquired a majority stake in Tingstad, a Gothenburg, Sweden-based distributor of non-food consumables. Financial terms were not disclosed.
- Scarlet Security & Risk Group, a portfolio company of Trilogy Capital Partners, acquired Elite Residential Concierge, a Toronto, Canada-based provider of residential security and concierge services. Financial details were not disclosed.
- DoseSpot and Arrive Health merged into Interra Health, a Boston, Mass.-based company that provides patient-centric prescription services. Bain Capital is leading the investment supporting the merger and will serve as the majority owner of Interra Health.
EXITS
- Boyne Capital sold McKee Utility Contractors, a Prague, Okla.-based infrastructure services platform, to MasTec for $276 million.
- BCP sold United Utility Services, a New Orleans, La.-based electric utility infrastructure provider, to Sandbrook Capital, in partnership with funds managed by Blackstone Credit & Insurance.
- Arlington Capital Partners sold Forged Solutions Group, a Derbyshire, U.K.-based provider of complex, precision forgings to aerospace, defense and space customers, to J.F. Lehman & Company. Financial terms were not disclosed.
- Searchlight Capital sold Euclid Transactional, a New York-based global transactional insurance solutions provider to CRC Group. Financial terms were not disclosed.
OTHERS
- Global Infrastructure Partners, a portfolio company of BlackRock, and EQT, alongside CalPERS and Qatar Investment Authority, agreed to acquire AES Corporation, an Arlington, Va.-based clean energy supplier, for $15 per share in cash. The deal valued the company at $10.7 billion in equity, a 40.3% premium to its 30-day VWAP before July 8, 2025.
- Malibu Boats Inc. bought Saxdor Yachts, a Helsinki, Finland-based yacht brand for $176 million.
- The British Business Bank invested $33.5 million into Kraken, a London-U.K. based software firm.
- J. Safra Sarasin Group acquired 71% of Saxo Bank, a Copenhagen, Denmark-based investment bank. Financial terms were not disclosed.
- 360training.com, Inc., a portfolio company of GreyLion and Vestar Capital Partners acquired select assets of Canadian Food Safety Group, including its SafeCheck® Learning and SafeCheck Safety® brands, proprietary course content, certification programs, and related web domains. Financial terms were not disclosed.
IPOS
- Vincorion, a Wedel, Germany-based technology firm, is slated to begin formally marketing its initial public offering in Frankfurt, according to Bloomberg. The IPO could seek to raise approximately $351 million.
- PayPay Corp., the Tokyo, Japan-based digital payment provider run by SoftBank, is delaying the formal marketing for its U.S. initial public offering, according to Bloomberg. PayPay originally sought a valuation of more than $10 billion.
- Mercator Acquisition, a Norwalk, Conn.-based blank check company led by Hondius Capital Management, filed to raise up to $250 million in an initial public offering of 25 million units priced at $10.
- SUMA Acquisition Corporation, a Toronto, Canada-based blank check company led by Naseem Saloojee filed to raise $150 million in an initial public offering of 15 million units priced at $10.
- Long Table Growth Corporation, a Dallas, Texas-based blank check company led by Gregory Ethridge filed to raise $200 million in an initial public offering of 20 million units priced at $10.
FUNDS + FUNDS OF FUNDS
- Bregal Sagemount, a New York-based firm, raised $3.5 billion for its fifth fund focused on continuing its plan to provide flexible, solution-oriented capital to durable growth businesses with high recurring revenues operating in end markets.
PEOPLE
- Sixth Street hired Sir Richard Moore as a senior strategist. Previously, he served as the chief of the British intelligence agency MI6.
- Littlejohn & Co. hired Shant Mardirossian as managing director, chief operating officer, and head of strategic initiatives. Previously he was at Kohlberg.
- SOSV hired Avra van der Zee as a general partner. Previously, she was at Elemental Impact.
- Sverica Capital Management promoted Michael Dougherty to partner and Doug Patrican to principal.
- Sverica Capital Management hired Matt Johnson as a principal. Previously he was at Marlin Equity Partners.
