Microsoft asks OpenAI for its share, OpenAI's former CTO is raising money, and a $600 Buzz Lightyear doll

StrictlyVC Newsletter Briefing - October 19, 2024 Main Themes: AI's Growing Impact: AI is making waves in various sectors, from fraud detection (Treasury Dept.) to education (Byju's) and healthcare (Ikerian). However, concerns about its ethical use and accuracy remain prominent. Funding Landscape: Despite some high-profile down rounds and bankruptcies, funding continues to flow into promising startups across sectors like renewable energy, healthcare, and AI. OpenAI's Transformation: OpenAI's potential shift to a for-profit model and the return of co-founder Greg Brockman signal significant changes for the leading AI company. The Elon Musk Factor: Musk's proposed changes to X's blocking feature are sparking debate about online safety and harassment, highlighting the challenges of balancing free speech with user protection. Important Facts and Insights: Microsoft and OpenAI are negotiating equity stakes as OpenAI prepares to become a for-profit entity. This signifies a potential deepening of their existing partnership. Google secures a legal delay in its antitrust case with Epic Games. This postpones the legal reckoning for Google's control over the Android app store. Byju's, once a highly valued edtech company, is now claiming to be worthless. This highlights the volatility of the startup ecosystem, particularly in the edtech sector. The NHTSA is investigating Tesla's Full Self-Driving software following several crashes. This raises concerns about the safety and reliability of autonomous driving technology. Elon Musk's plan to modify X's blocking feature is drawing criticism for potentially facilitating harassment. Critics argue that the change removes an essential safety mechanism. “i’m sure someone from twitter (elon) is arguing that block evasions were always possible from other accounts but the point is that friction matters!! making it easy for a creeper to creep is not a good thing!!” The U.S. Treasury Department credits AI with preventing $1 billion in fraud, a sixfold increase from the previous year. This demonstrates the significant potential of AI in combating financial crime. Former OpenAI CTO Mira Murati is fundraising for her new startup, while co-founder Greg Brockman is returning to the company. These moves suggest ongoing dynamism and evolution within OpenAI's leadership. Key Quotes: “Blocking public posts makes no sense. It needs to be deprecated in favor of a stronger form of mute.” - Elon Musk on his proposed changes to X's blocking feature. "It’s worth zero. What valuation are you talking about? It’s worth zero.” - Byju Raveendran, founder of Byju's, on the current state of the company. Financial Highlights: Several startups raised significant funding rounds, including Eruditus ($150 million), SandboxAQ (targeting $5 billion valuation), and Terralayr ($67.4 million + $16.3 million debt). Acrew Capital raised a new $700 million fund, bringing its total assets under management to $1.7 billion. Overall Takeaway: This newsletter paints a picture of a tech landscape in flux, with AI's influence growing rapidly but not without its challenges. While funding remains available for promising startups, cautionary tales like Byju's highlight the need for careful scrutiny. Meanwhile, Elon Musk's actions at X continue to stir controversy, raising questions about the future of online platforms.