Sriram Krishnan named Trump’s senior policy advisor for AI & AI hallucinations are driving new scientific discoveries.

STARTUPS RAISING MILLIONS

Startup Funding Updates

AI and Quantum Techniques Solution Firm Raises $5.3M

• SandboxAQ, a Palo Alto, CA-based company delivering solutions at the intersection of AI and quantum techniques, raised more that $300M in funding.

• The round, which valued the company at $5.3 billion on a pre-money basis, was led by Fred Alger Management, LLC, T. Rowe Price Associates, Inc., Mumtalakat, Parkway Venture Capital, Breyer Capital, Rizvi Traverse, S32, US Innovative Technology Fund, Ava Investments, Eric Schmidt, Marc Benioff, David Siegel, Yann LeCun, IQT, and other investors.

AI Platform For Life Science Company Raises $10 M

• Bluenote, a San Francisco, CA-based generative AI platform for life sciences companies, raised $10M in financing.

• The round was led by Lux Capital, with participation from Elad Gil, Anthropic & Menlo Ventures Anthology Fund, McKesson Ventures, Avichal Garg/Electric Capital, Moxxie Ventures, Carbon Silicon Ventures, and leaders in AI and life sciences – Othman Laraki (CEO Color Health), Fidji Simo (CEO Instacart, Co-founder Metrodora Institute, OpenAI Board), Mike Nohaile (CEO Prellis Biologics, previously Amgen & Novartis Executive), Kristen Fortney (CEO BioAge), Eric Morgen (COO BioAge), Qasar Younis (CEO Applied Intuition), Linus Upson (Verily), and Jeffrey Low (Life sciences investor).

AI Powered Chargeback Management Firm Raises $30 M

• Justt, a NYC-based AI-based chargeback management company, raised $30M in Series C funding.

• The round was led by Zeev Ventures with participation from existing investors Oak HC/FT and F2 Venture Capital.

AI-driven Leadership Development Firm Raises $5.4 M

• Tenor, a San Francisco, CA-based provider of AI-driven leadership development solutions for managers, raised $5.4M in Seed funding.

• The round was led by Base10 Partners, with participation from Reach Capital and angel investors across the AI, HR technology, and learning spaces.

AI-Powered Tax Research Firm Raises Undisclosed Amount

• Blue J, a Toronto, Canada-based provider of generative AI-powered tax research to accounting and tax professionals, raised an undisclosed amount in Series C funding.

• The round was led by Ten Coves Capital. Dan Kittredge, Managing Partner at Ten Coves Capital, will join Blue J’s Board of Directors.

Elon Musk’s xAI lands another $6 Billion funding

• xAI secured $6B from major investors, reaching $12B total funding and $50B valuation. Notable backers include BlackRock, Nvidia, and Andreessen Horowitz.

• Company's Grok AI generates $100M annual revenue, integrates with X platform, but trails OpenAI ($4B) and Anthropic ($1B).

• Infrastructure expanding with 100K GPUs, while Musk pursues AI integration across Tesla/SpaceX amid OpenAI legal disputes.

AI-Powered Intelligent Automation Firm Raises Millions

• HuLoop Automation, an Auburn, CA-based leader in AI-powered intelligent automation, closed its Series A funding round of undisclosed amount.

• The round was led by Mighty Capital, with participation from Folsom, and Moneta Ventures.

AI-Powered Electronic Device Design Firm Raises $6.8M

• Cadstrom, a Montreal, Canada-based AI expert system that enables electrical engineers to design electronic devices correctly on the first try, raised $6.8M in Seed funding.

• The round was led by Bison Ventures with participation from Innovation Endeavors and AI2 Incubator, which previously invested $650K in a pre-Seed round.

KEY AI STORIES

What Companies Are Doing With AI

xAI is testing a standalone iOS app for its Grok chatbot

• xAI launches standalone Grok iOS app in beta (starting in Australia), expanding beyond X-only access with features like real-time web data, text generation, and image creation.

• App offers unrestricted image generation capabilities, including use of public figures and copyrighted material, focusing on "photorealistic rendering."

• Grok expanding accessibility through new channels: free version now available to all X users, and web access coming via Grok.com.

Sriram Krishnan named Trump’s senior policy advisor for AI

• Trump names Sriram Krishnan, former a16z partner, as White House senior AI policy advisor, working alongside David Sacks (crypto/AI czar) and Elon Musk (Department of Government Efficiency).

• Krishnan brings tech leadership experience from Microsoft, Twitter, Facebook, and Snap. He previously worked with Musk on Twitter/X's restructuring.

• In his recent NYT piece, Krishnan advocated for technical solutions over legal action regarding AI companies' data access, suggesting new value exchange mechanisms between websites and AI chatbots.

AI hallucinations are driving new scientific discoveries.

• AI hallucinations - typically seen as errors - are proving valuable for scientific discovery, with researchers using these "imagined" concepts to drive innovation in cancer research, drug design, and meteorology.

• Scientists are deliberately leveraging AI's tendency to generate unexpected or incorrect results to explore new possibilities that human researchers might not have considered.

• This flips the conventional view of AI hallucinations from a pure liability to a potential source of scientific creativity and exploration.

OpenAI’s o3 suggests AI models are scaling in new ways — but so are the costs

• O3 sets new AI benchmarks (88% ARC-AGI, 25% math) using test-time scaling, but costs spike to $1,000+ per task vs $5 for older models.

• Due to high compute costs, o3 is viable only for critical institutional decisions, not everyday queries. Despite advances, challenges remain: high costs, slow responses (10-15min), and ongoing hallucination issues show AI's current limitations.

Coralogix acquires AI observability platform Aporia

• Coralogix acquired AI monitoring startup Aporia (raised $30M previously) to expand its observability platform into AI workload monitoring and security.

• Acquisition enables unified monitoring across traditional and AI workloads, with Aporia's founders leading new Coralogix AI research center.

• Move aligns with industry trend of larger platforms acquiring specialized solutions as enterprise customers prefer comprehensive monitoring solutions.

A popular technique to make AI more efficient has drawbacks

• AI companies 'simplify' their models through quantization - like rounding 12:00:15 to "noon" - but research shows this hurts performance in larger models.

• Bigger isn't always better - when Meta simplified their large Llama 3 model, it performed poorly, showing that massive AI models (costing billions to run) might not be the answer.

• Future focus should be on building efficient smaller models from the start, rather than creating huge ones and trying to shrink them later.

EMERGING AI TOOLS - DON’T MISS THESE

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Tempo Labs - Visual Editor for React, powered by AI

Tempo is a Visual Editor for React, which gives PMs, designers, and engineers the ability to collaborate visually on code. It offers the familiar UX of a design tool but functions like an IDE under the hood.

PUBLISHED PAPERS AND ARTICLES

Something is cooking in AI Industry

a16z request for AI Founders

Recently a16z published an article where they request upcoming founders to work on some of few ideas like: advanced, personalized memory bank, enabling real-time collaboration, specialized video generation, integrated qualitative and quantitative analysis, and the emergence of autonomous chatbots operating in decentralized networks.

Ilya Sutskever talk at NeurIPS 2024 in Vancouver, Canada

In recent talk, Ilya (Former Cofounder Open AI) declares we've reached "peak data" for AI training, comparing internet data to fossil fuels - a finite resource that's running out. Highly recommend video to watch.

AI EVENTS

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• EAI AICON 2025 - International Conference on Artificial Intelligence for Communications and Networks - Registered Here

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