OpenAI cut its valuation to $1.25tn and shrank its round to $20bn with only about $11bn committed, a sign of softening demand for the IPO-bound giant.
Rory O'Driscoll argues demand is the real test: if it holds, debt worries fade, but smaller players like CoreWeave will suffer first.
DoorDash's $17bn Instacart purchase, under half Instacart's 2021 private price, is a deal Jason Lemkin says should be done because agents threaten DoorDash's share.
OpenAI Cuts Valuation to $1.25tn as Round Shrinks
Funding and deals
OpenAI. OpenAI cut its round from $30bn to $20bn at a $1.25tn valuation, down from $1.4tn, with only about $11bn committed.
Instacart. DoorDash is buying the grocery delivery company for $17bn, under half its 2021 private price, giving the pair about 80% combined share.
Kalshi. The prediction and sports betting market raised $1bn at a $40bn valuation, with Sequoia investing, a day after Utah charged its founders.
Cognition. The AI coding company behind Devin is eyeing a $70bn to $80bn valuation, boosted by its purchase of the Windsurf team and IP.
Cohere. The Canadian LLM developer raised what may be Canada's largest private round, with the government investing up to $1.14bn and no revenue disclosed.
Physical Intelligence. The robotics foundation model company is in talks with Avenir and Lux to raise at a $20bn valuation despite relatively little revenue.
Cresta. Salesforce is acquiring the AI company for $2.7bn, about 10 times revenue, which Harry Stebbings called a pretty good deal.
Serval. The ServiceNow challenger is valued at $3bn, up from $1bn in December, and Rory O'Driscoll gives it a 70 to 80% chance of becoming the next ServiceNow.
Baseten. The company is valued at $30bn, double its June price.
Weil, Gotshal & Manges. Crosby bid for the collapsed law firm's assets after a partner dispute, a move Rory O'Driscoll called chutzpah.
Hugging Face. The $12.9bn Hugging Face deal has drawn some DOJ scrutiny, though Jason Lemkin says no formal request has been made.
Creandum. The European venture firm raised a $750m fund.
News
AI stocks shed $5tn in a week. Jason Lemkin flags volatility, with Broadcom guaranteeing Anthropic's debt and CoreWeave debt paying 15%. Rory O'Driscoll says demand is the real test, and CoreWeave suffers first if it falters.
Alphabet suffers its biggest drop in a decade. Shares fell about 12% as search growth slowed to about 12% and free cash flow turned negative, despite Cloud growing 103%. Rory O'Driscoll blames search cannibalisation and capex fears.
Anthropic's quarterly growth halves to about 50%. GAAP revenue rose from about $5bn in Q1 to $17bn in Q3, still fivefold year on year. Jason Lemkin blames pricing pressure, while Rory O'Driscoll projects $56bn this year and $120bn next.
Squarespace launched 20% layoffs and Dropbox cut 9% of jobs. Jason Lemkin says Canva's growth decelerated and he turned it off after twelve years.
Squarespace and Dropbox cut jobs as Canva stalls.
Heavy AI users strain product economics. Jason Lemkin estimates Grok could cost $20 a month per user to serve. Rory O'Driscoll says digital products always launch before the economics work, with prices falling 50 to 60% a year.
Binance loses $6.6bn in stolen crypto. Rory O'Driscoll says Binance's ability to cover roughly $6bn shows it is a very profitable business.
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