Apple drops out of OpenAI funding talks, the rise of the 'intern' CEO, and what happens now to 23andMe's trove of data?

Venture Capital and AI: A Weekly Roundup This briefing document summarizes key themes and insights from the September 28th edition of the StrictlyVC newsletter. Key Themes: OpenAI's Turbulent Growth: The leading AI company navigates massive funding rounds amidst leadership shakeups and scrutiny. AI's Dominance in Startups: Y Combinator's latest Demo Day underscores the overwhelming focus on AI solutions across various sectors. Ethical and Practical Considerations: From AI's energy consumption to the potential sale of genetic data, ethical and practical challenges surrounding AI applications require attention. OpenAI in the Headlines: OpenAI remains a focal point in the tech world, simultaneously attracting investment and criticism. Funding and Valuation: Despite recent executive departures, OpenAI is reportedly finalizing a $6 billion funding round at a staggering $150 billion valuation. However, Apple has reportedly withdrawn from the funding talks. Financial Burn Rate: The New York Times reports OpenAI is experiencing rapid growth coupled with significant financial burn. Leadership and Equity: CEO Sam Altman addressed employee concerns about a potential "giant equity stake" for himself as the company transitions to a for-profit model, denying such plans. Y Combinator Demo Day Highlights AI's Pervasiveness: Y Combinator's Summer 2024 cohort showcases the overwhelming influence of AI on the startup landscape. AI-Powered Solutions: Startups like Entangl (automating engineering error detection) and Exa Laboratories (developing energy-efficient AI chips) exemplify the diverse range of AI applications. Addressing AI's Energy Consumption: Exa Laboratories' focus on energy-efficient chips directly tackles a growing concern: AI's significant energy footprint. Early tests suggest their chips could be "nearly 28 times more efficient than Nvidia's H100s." Funding Focus on AI and Healthcare: Funding announcements further emphasize AI's dominance, particularly in healthcare. Significant Investments: Mendaera, developing a robotic system for needle-based medical procedures, secured $73 million in Series B funding. Global Reach: Mediwhale, a Seoul-based startup using AI for retinal image analysis and disease prediction, raised $12 million in Series A2 funding. Ethical Concerns and Data Privacy: The newsletter also highlights critical questions about data privacy and ethical considerations related to AI. Commodifying Genetic Data: The potential sale of 23andMe's vast genetic database raises ethical concerns about data privacy and informed consent. As The Atlantic notes, "If you let 23andMe test your genetic data, your DNA might soon be up for sale to the highest bidder." Other Notable Trends: "Intern CEOs": The emergence of young and inexperienced individuals in CEO roles signals a potential shift in leadership demographics. AI's Revenue Generation: Data from Stripe indicates that AI startups are experiencing faster revenue generation compared to previous SaaS startups. Conclusion: This edition of StrictlyVC provides a snapshot of the rapidly evolving landscape of AI, highlighting its vast potential, accompanying challenges, and the significant financial interest it continues to attract.