AI Startups Lobby for Influence

TECH IN THE NEWS

Strike Two - CrowdStrike has been sued by its shareholders claiming it defrauded them by concealing the risks created by its inadequate software testing that lead to the outage that crashed over 8 million computers.

Chipmakers Record Pump - Nvidia, AMD shares rose nearly 13% after Microsoft and other companies said they are stepping up AI investments.

Voice Activated - OpenAI has rolled out its Advanced Voice Mode with conversational AI capabilities to a select group of ChatGPT Plus users.

Uber x BYD - Uber has partnered with Chinese EV maker BYD to roll out 100k self-driving EVs in the EU, LATAM and other nations (but not the U.S.).

Q2 Earnings Season - Microsoft’s high AI CapEx and Azure cloud revenue miss spooked investors. Amazon’s ad revenue didn’t impress. Apple beat on revenue but investors were unsure on AI investment ROI.

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THE HOTTEST THING IN TECH
AI Startups Lobby for Influence

The issue of how the US will regulate AI is intensifying. The EU's AI Act came into force yesterday with its risk-based framework. Washington is now grappling with competing legislative proposals and intensive lobbying efforts.

A Patchwork of Proposals

The US’ approach to AI regulation remains fragmented. While the White House has released a "Blueprint for an AI Bill of Rights" emphasizing responsible AI development, concrete legislation is still under debate. Competing Senate bills propose varying levels of regulation, from voluntary measures to mandatory risk assessments and disclosure requirements.

A lot depends on the next Senate makeup. Kamala Harris was heavily involved in drafting the Biden Admin’s blueprint and rejects the “false dichotomy” of innovation vs risk mitigation.” A new Commerce Dept. report hints at her direction, recommending new risk-based capabilities. 100+ Silicon Valley VCs just came out in support of Harris’ campaign.

However, a senior Senate Republican aide reportedly claims there is evidence of Big Tech regulatory capture in the Biden administration's approach. The Trump/Vance campaign is advocating a far less regulated approach with support from other major VCs active in the sector.

Lobbying Intensifies

As the legislative landscape evolves, AI startups are ramping up their lobbying efforts. New data shows that the number of groups lobbying on AI grew from 459 in 2023 to 556 in H1 of 2024. OpenAI alone has spent $800k in 2024 versus $260k in all of 2023 and has grown its team of outside lobbyists from three to 15 consultants. Anthropic is on track to spend half a million dollars on lobbying over the next few months

OpenAI has endorsed specific Senate bills that align with its interests, highlighting the stakes involved for AI companies and stressing the geopolitical risk of China getting ahead in AI innovation. On Monday, it and Microsoft, Meta, Amazon and others signed a letter to lawmakers in support of letting the AI Safety Institute lead industry and officials to develop standards through the Under the Future of AI Innovation Act.

What it Means for Investors and Innovators

The ongoing debate and intense lobbying suggest that the path to comprehensive AI regulation will be tortuous. As AI continues to transform industries, regulatory compliance will become increasingly important for companies developing and deploying AI systems. Staying informed about the latest developments will be essential for investors navigating this space.

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1. Robotics for Agricultural Efficiency - Pittsburgh - Built & deployed robotic hardware for the largest U.S. tree nurseries, reducing costs and increasing efficiency by 50x. Hardware and AI data layer. Beginning to scale globally. Post-revenue, at capacity. (Seed+)

2. Cricket for the Modern World - India - Physical and virtual ecosystem fostering cricket experiences for enthusiasts and upcoming professionals. Data-driven, locally proven, globally scaling. (Seed)

3. AI Agent Employees - New York - Sophisticated workflow automation for businesses towards fully autonomous organizations. Previously-exited founder. Backed by Tribe & Kenetic. (Seed)

4. Outbound B2B Campaign AI Co-Pilot - Lexington, MA - Turn any CRM into an AI optimized sales agent for personalized customer campaigns. Founder previous exit to PE. Notable Angel on board. Top Hubspot App. Post revenue. (Seed)

5. Therapy for Baldness - Los Angeles, CA - Developed by ex-Kythera R&D Leader. Virtual development model and world class team seeking to fund POC study. (Seed)

FOR EMPLOYERS
Job Candidates

Request an intro to candidates - jobs@thetech.buzz.

1. Struck Capital Venture Associate, ex-West2East (Russell Wilson) Director of Special Projects, ex-Phoenix Holdings Investment Associate. Harvard BA. Vietnamese pro basketball player.

2. Lockheed Martin Software Engineer, ex-Rutgers Junior Full Stack Developer. Secret clearance. Expertise in C++, PHP, SQL. Rutgers BA in Computer Science.

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Baidu - Paper claims new "self-reasoning AI" is immune to hallucinations.

California DMV - Puts 42M car titles on blockchain for transparency.

Medical AI: 1. AI could help predict the risk of bowel cancer return. | 2. AI reprograms ‘glioblastoma’ cells to destroy Brain Cancer in mice.

DEALS WE’RE WATCHING
Closed Deals:

Fertility Tracking App - UK startup Flo Health raised a $200M+ Series C at $1b+ post-money, led by General Atlantic. It serves 380M users and 70M MAU globally.

Fusion Energy - Tennessee startup Type One Energy extended its seed round by $53.5M led by Bill Gates’ Breakthrough Energy Ventures bringing the total seed to $82.4M.

Robotic Surgery - New York Medical Robotics startup Clarapath closed a $36M Series B-1, bringing its total raise to $75M. Northwell Ventures led and Mayo Clinic joined the round.

Deals to Watch:

Aurora Innovation - The publicly owned self-driving technology company upsized its upcoming raise to $420M due to strong demand as it targets a SaaS driverless truck launch by end of 2024.

Lineaje - CrowdStrike, Hitachi, Prosperity7 and others backed this software supply chain security startup’s $20M Series A. It’s also partnered with distributors, including Persistent Systems and KPMG.

Pershing Square - Bill Ackman scales back the IPO for its closed-end fund, now targets $2b instead of $25b.

Funding Buzz Watch:

PIF - The Saudi sovereign wealth fund signed $50b worth of deals with Chinese financial firms to cooperate by encouraging two-way capital flows via both debt and equity.

XYZ Venture Capital - Ross Fubini’s San Francisco VC firm (an early Anduril backer) has raised $325M for its fund iv to back AI-driven defense and public sector tech. It also added a former Apple/Palantir employee as a partner.